Singapore
The Hawker and the Banker
A Singaporean student on home leave writes about what he sees as a society dividing rich and poor. Oikono.
Jan 7, 2007

(Geoffrey (Kok Heng) who is studying at Wharton School, University of Pennsylvania, runs Oikono weblog)

Having last visited Singapore two years ago, I expected the city to be radically different.

However, the area where my family stays hardly changed and even Orchard Road looks the same. City Hall appears different, but it is in the prices that I observed the biggest change.

What struck me in particular was not so much the increase in prices, but how uneven the price changes have been.

This uneven price changes has distributional impacts on what I see as two diverging segments of society.

Singapore is increasingly populated by two groups of people: the Hawker and the Banker.

In Singapore, hawkers refer to the people who work in large food centers selling food or drinks. A few strike it rich but most are typically uneducated and belong to the poorer segment of society.

I know this because my father is one of them, selling drinks in one of the large outdoor food centers that populate the island.

But the Hawker I use in this analysis is a larger segment of society: the Singaporeans who lack the education to be globally mobile and benefit from global wage levels.

This group is larger than you think. It includes many local graduates who accept stagnant local wage structures, and compete with educated immigrants from China, India or Nepal for white-collar jobs.

On the side of the divide are the Bankers, not just people in the financial industry, but people who have a world-class education (often international) that gives them opportunities to pursue jobs as consultants, investment bankers, traders…etc.

These jobs pay a globally competitive wage – a premium often reaching two or three times the average wage of a local graduate.

What struck me about prices when I returned was how the food sold by hawkers around the area I lived has barely budged.

I do not know if this phenomenon is island-wide, but it was surprising to see a plate of Char Kway Teow still at the $2 or $3 I paid when I left.

I met my former boss, a distinguished economist, and he felt the same way about the unequal prices.

Are the Hawkers competing in a different world? One where being local meant facing competition that erodes pricing power and depresses wages?

I talked to my mother, a nurse, and she said that wages have not risen in line with inflation over the past two years.

While these prices have remained stagnant, I noticed that it was not so in the city area. What I though of as a fancy night out at Crystal Jade La Mian Xiao Long Bao now came with fancier prices.

I went to look at cufflinks at Alain Figaret as I liked to do. They are now 20 percent pricier.

Another night, I was at a dinner hosted by one of Banker-type firms. It was for students studying at overseas university. All of the Bankers hosting us were from distinguished American and British universities.

A Singaporean student at the table flew with her family to exotic locations every holiday, sometimes over weekends, dined frequently at expensive restaurants in Singapore whose fancy names I never heard of, and could hardly pronounce.

One of the Banker-types was born in Singapore, grew up in the US/UK, and never ate in a food centre in Singapore. They earned the global wage, one most Singaporean undergraduates dream off.

They lived in another world beyond the sight of most ordinary Singaporeans; one I did not know existed until I left Singapore.

The Economist (Economics Focus Dec 22, 2007) observed that rising income inequality in modern societies does not result in a large difference in material comforts.

However, I worry about what this gap means for a society in terms of power inequality and shared experiences.

Can the Banker understand the life of a Hawker? Can he empathise with their difficulties or being so far removed from them, he wonders why anyone would need social security, handouts or subsidized healthcare?

Will inequality mean that we have two groups living in two Singapores: one where fine dining, exotic holidays, and posh cars define a Singaporean experience, another where hawker food, trips to Johor Bahru, and SBS dominates?

Walking around Bugis, I glimpsed people sleeping on the sidewalks and I wonder. - Posted by Oikono

Comments

at82 Says:
Maybe Singapore is also fast becoming a M-shape society like Japan and Taiwan. (An explanation of “M” society follows this article.)

footix24 Says:
Your observations are interesting.
I question about how mobile is the economic ladder in S’pore - if one works hard and preserve, is it possible to achieve success?
My own observation is that this phenomenon - as you put it nicely, the Hawker and the Banker - reflects or mirrors our political scene as well.

Masindi Says:
Singapore may have meritocracy but it only gets as high as the non-ministerial level. At ministerial level what they have is something like elitism.
am i correct?

fm Says:
A more apt title would be “The Peasant and the Elite”.

ccc Says:
The PAP gahmen ignores this problem of gross inequality (all of their own making, beginning with their million-dollar salaries) at their peril.
The seeds of the Singapore Revolution by its peasants have already been sown when Mrs Peanuts exclaimed that $60K/month salary for her favourite Mr Durex was “just peanuts”.

Onlooker Says:
And Therein lays the beauty of Democracy. As accountability and responsibility by the Bankers decrease, The possibilities of the real majority realising that imbalance will increase proportionately. Terms such as “Conservative minority”, “under consideration” will be used disparately to provide a non answer to critical questions. The point is not of Getting there (rich) but of getting balance (narrowing of gap).
Point in case:- The recent loss of (Australia) John Howard to the labor party. Citizenship Bribery (Taiwan) will only work to a certain extent. But that in itself have repercussions.
However one must note of the 80/20 rules that have been propagated by some C motivated writer whose main goal is to create an illusion of such happenings
So the bottom line is the hawkers will choose ultimately (between imported competition and price adjustments) but only when it is too late for some (foreclosure due to non profitability).
One have to note though the Debt (credit/unreasonable escalation etc) Economy have reach our fair isle.

Alan Wong Says:
It’s a fact that our elite Ministers will never be able to understand the life of the peasants!
It’s rather ironic when they start.…. to come up with all kinds of different ideas to ‘improve’ on the well-being of the less fortunate.
For example, one of our elite Ministers has sneered at the peasant housewife who would rather stinge on the fee for a breast cancer check but not that for a regular hair perm.
The real question is why can’t they just make the option of free testing available. It’s not as if it would cost a bomb especially when you compare the cost with the additional millions of dollars that are being paid to our Ministers annually.
Another example is the additional 2% GST increase supposedly to help the poor. It now appears that the additional increase is being used instead to pay for the recent hike in the Ministers’ pay packages.
When you have a system of paying sky high salaries to our ministers, the end result is that eventually it’s our peasants who will suffer the most because of frequent increase in GST, taxes, fees, charges, levies, COEs, tolls, etc. implemented by the same Ministers who will now need to justify their existence.
It will just end up in a never-ending vicious cycle!

http://www.oikono.com/wordpress/?p=395

M-shape society
at82 earlier said: Maybe Singapore is also fast becoming a M-shape society like Japan and Taiwan.
What is an M-shape society? Read wikipedia below:

‘M-shape society’ is an observation put forward by the Japanese business strategist and writer Kenichi Ohmae. According to his observation, Ohmae argued that the structure of Japanese society has emerged into a 'M-shape' distribution.

In a well-developed modern society, the distribution of classes is in a 'normal distribution' pattern, and the middle class forms the bulk of the society.

However, in the emergence of the 'M-shape society', the middle class in the society gradually disappeared. A very few people in this middle class may climb up the ladder and squeeze into the upper class, while the others in the middle class gradually sank to the lower classes.

These people experienced a deterioration in living standard. They may face threat of unemployment, or their average salary are dropping. Gradually, they can only live a way the lower classes live: e.g. take buses instead of driving their own car, cut their budget for meals instead of dining at better restaurants, spend less in consumer goods...

There may be still remarkable progress in economic development, the GNP may still rise, there may still be economic growth, and the national average salary may still rise. However, the wealth increase in this growth may concentrate in the pockets of the very few rich people in the society. The masses indeed cannot benefit from the growth, and their living standard is on the decline.

What was worse, the upward social ladder seems to have disappeared - opportunities and fair competition become fewer and fewer. People in the lower class can no longer climb up the ladder: they cannot earn a high-paid job or have stable employment, even if they have a high level of education. The places in the upper class were reserved by the upper class for their descendants.

This notion became a hotly-discussed topic in Japan. And as Ohmae's book was translated into Chinese version, it also became a hotly-discussed topic in Taiwan, and later in Hong Kong.

In Hong Kong, there are scholars, intellectuals and social-scientists arguing whether the conditions of Hong Kong fits the notion Ohmae put forward: e.g. diminishing social mobility and upward social ladder, the general income-decline and threat of unemployment of the middle-classes, the change of competition rules for social advancement (such as pursuit for better schools) in which status advancement is no longer based on merits or achievements, but on other certain criteria such as family wealth or background.

The lives of the lower classes seem more miserable than the past even when there is still economic progress and rise in the GDP.

It has become a concern for the government as the income gap between the lower classes and the upper classes has been widening in recent years.
http://en.wikipedia.org/wiki/M-shape_Society