Wealth gap and a minister’s remark

The PAP man asked his undergraduate students: Do Singaporeans want to live in a city with the opportunities of New York and London? If you do, how would you address the issues — the wealth gap — that come with that choice?

The foot-in-the-mouth remark came from Lawrence Wong, acting minister for culture, community and youth). He was answering a Singapore Management University student’s remark that Singaporeans had no lower cost hinterland to move to; the minister had said that the Gini coefficient for cities (like New York and London) was higher than for the whole of the US or Britain. The students questioned the government’s policies to close the rich-poor gap in Singapore — or the Gini coefficient, an international measure.

It’s a “take it or leave it” answer to concerns about the high cost of living here. Arrogant? Definitely. Grounds for such arrogance? Government transfers (the Pioneer Generation Package and subsidies) had reduced Singapore’s Gini coefficient from 0.4.78 to 0.412, the lowest in a decade. Without government transfers, Singapore’s income gap would stand at 0.463.

Our economists and sociologists should brief politicians like Wong that cities such as New York and London do not have the government as the supplier of all land, and thus the manipulator of property prices. The high cost of owning a home undermines the government’s policies to increase the birthrate: there is no room for families to grow and maintain a reasonable standard of living. So our better-educated youth cannot be blamed for looking for other choices in which to raise a family with quality of life.

However, Wong’s “take it or leave it” response is particularly insensitive as youth also know that the quality of their young adult lives is likely to be more interesting in London and New York than in Singapore. And these young Singaporeans have the opportunity to leave Singapore. That is why the money that goes into the multi-million-dollar “Singapore Days” held in London, Sydney, New York and Shanghai to draw Singaporeans home could be better spent in more “transfers” and more measures to reduce the Gini coefficient further.