The politics of the minimum wage: Hong Kong, Malaysia… and Singapore?

Warning: Everyone and their grandmother has written about the pros and cons of the minimum wage. That is not the subject of this piece. Irrelevant comments solely about how the minimum wage is the bee’s knees or devil spawn will be deleted.

Why do countries adopt a minimum wage? Surprise, surprise: there are arguments on both sides for the minimum wage. Economists don’t agree. And it’s no wonder. Wage dispersion and unemployment are affected by many factors other than the minimum wage, so the literature on minimum wage will always be inconclusive. In other words, we’ll never be able to say whether the minimum wage, as a general rule, is a good or bad thing. Rather, the best we can do is to find out whether it helped or hurt in a specific instance where a minimum wage was implemented or raised. And before it’s implemented, we can argue all we like but it is next to impossible to model or predict the likely effects. Even in the UK (whose economy is far better studied than Singapore’s), pre-minimum wage fears of job losses have been recognised even by the Conservatives to have been unfounded. So I think if a minimum wage were ever to be implemented in Singapore, the decision would be taken on political grounds, not econometrics. In this piece, I’m not making any judgement on the merits of the minimum wage; instead, I want to focus on the politics of the minimum wage—what makes the introduction of a minimum wage likely or unlikely.

I don’t think it’ll happen in Singapore anytime soon. Here’s why: our labour movement is well-integrated with the government, and the media and political opposition is weak. Having taken care of three possible sources for minimum wage demands, it is difficult to imagine another source for minimum wage demands to emerge and gain political traction. And the progressive wage model which has recently come into effect (albeit only for cleaners) may, instead of leading up to a minimum wage law, defuse demands for the introduction of a minimum wage.

To the best of my knowledge, in the region the minimum wage has been implemented most recently in Hong Kong (legislated 2010, implemented 1 May 2011) and Malaysia (legislated 2012, implemented 1 January 2013). I’ll take each of those cases in turn. (Myanmar also implemented a minimum wage in 2013, but there’s just too little written on it to work on. The UK implemented theirs in 1999, and two good policy analyses for that can be found here and here.)

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The need for a new welfare capitalism

This piece takes a step back from empirical work and invites the reader to join me in a bit of conceptual exploration, on the way goods and services are produced in a modern economy like Singapore’s, and the institutions that support those people who work to produce those goods and services.

To Singaporean ears, the term “welfare state” epitomizes all that is wrong with the decadent West: a state which saps the industry and drive of its people, rewards idleness and irresponsible fecundity, and yet delivers unemployment, crime, a breakdown of the family unit, and all that at far greater cost to the taxpayer than the Singaporean system. By contrast, we value work so much that we have neither a minimum wage nor an unemployment insurance. We value family solidarity, so we require those in need to turn to their family first—even to the extent of legislating a requirement for children to care for their elderly parents.

But defenders of Singapore’s system neglect a few vital facts. The foundations of our social institutions were laid down when our population was much younger and the occupational structure of our economy was less skill-intensive than it is today. The demographic dividend paid off by keeping healthcare costs and demands on the health system low. Meanwhile, it was possible for (largely healthy, young) workers to switch jobs and sectors in a relatively low-skill economy if they were made redundant. Jobs were fungible and it was a workers’ market in a long boom era of near-zero unemployment. If one were looking for empirical confirmation, I suspect that the CV of a typical 55- or 60-year-old worker nearing retirement today shows a surprising amount of diversity and adaptability in occupational choice.

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Protest movements and generational politics

“I can’t keep calm because Hong Kong is dying.” I’m sympathetic to Hong Kong’s student protestors, who are doing what their leadership has failed to do—press China to respect the self-determination that it promised Hong Kong. And it strikes me that should Hong Kong’s democratic movement succeed, many of its people’s concerns, like public housing and retirement adequacy, will make Hong Kong much more leftist than China is today. But that is not something I can usefully write about.

In keeping with a long tradition of comparing Hong Kong and Singapore, I’m thinking about the difference between the Occupy Central movement and this weekend’s widely-condemned Central Provident Fund (CPF) protest, and how it sheds some light on Singapore’s politics. Of all the ways that the two movements differ, one stands out: Occupy Central is driven by young people, while the CPF protestors are overwhelmingly old people. I think that has implications for politics in Singapore.

From the coverage of Occupy Central in the media like SCMP and BBC, it’s struck me that the vast majority of interviewees are in their 20s and 30s. I’ve read several cases of young people defying warnings from their parents. Even senior high school students are attending the protests. And it must be a typo, but SCMP reported that “13-year-old Matthew Chau” was smarting from the tear gas. Meanwhile, the mainstream pro-democracy leadership seems to be scrambling to keep up with the momentum. Though middle-aged protestors do exist, disapproval seems concentrated among the older generation, with a few isolated reports of anti-protest actions (for instance, the update from 11.40am on Monday on this live feed). The comparison in Singapore is the scrutiny over the NUS Student’s Union finances, but even that’s all been conducted by keyboard warriors, and I can’t tell if the vast majority of students care. You’d have to go back to the 1960s to find comparable student mobilisation in Singapore.

The news out of Singapore is that there was a confrontation between a Return Our CPF rally and a YMCA event held at Hong Lim Park at the same time. Accounts of what happened are confused and partisan, but it seems that the CPF protest set up its equipment at an area different from the one they were allocated, and following either innocent or malicious miscommunication, decided to march towards the YMCA event. This confrontation frightened a group of special-needs children who were about to perform at the YMCA event. Everyone and their grandmother will have something to say about what happened. Clearly, since I wasn’t there, I can’t do that, which is why I’m reflecting on a different aspect of the event. (more…)

The elitism of “private screenings” and “academic freedom”

Two weeks ago, Singapore’s Media Development Authority announced that they had banned public screenings of Tan Pin Pin’s film “To Singapore, with Love.” The film brings together interviews from political exiles and dissidents who have chosen to leave Singapore because they face perceived or real threats of state persecution. The MDA banned it for undermining “national security,” and claimed that the exiles had lied about the circumstances under which they had left. But it also mentioned (seemingly as an afterthought) that private screenings were permissible, and later, that the ban didn’t apply to screenings of the film for purely educational purposes.

While it has become clear that more and more Singaporeans are going to watch the film at events overseas (including over 350 at a screening in Johor Bahru, just across the border in Malaysia), Tan Pin Pin hasn’t agreed to any Singapore screenings, educational or otherwise. She’s specifically come out to say that she was not consulted by Yale-NUS about including the film in one of their classes. Given that till now the film has not been released anywhere for commercial distribution, there aren’t any bootleg copies from which people can organise private screenings. In short, Ms Tan has ensured that as long as the public ban stands, “To Singapore, with Love,” will not be shown in Singapore in any context. In my view this restriction on her part is absolutely appropriate—something I’ll argue in the rest of the piece.

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Could demographic change drive values change?

Summary: values change is often argued to push fertility rates down. But what about the reverse? That is, low fertility rates could drive values change. Fertility rates could recover in a generation if (for instance) more religious or conservative people have larger families, and their children go on to have larger families as well. But this would have implications for what we might think of as liberal, progressive values.

Some demographers have argued that people in North America, Europe, and East Asia are having fewer children because value systems have changed (for instance, people prize career and independence over family; some articles that argue this are Atoh 2001, Goldstein et al. 2003, McDonald 2000, 2006). This can be explained either purely through cultural change, or with reference to changing incentives. For instance, it’s plausible that having large families in some societies today invites stigma—that’s an example of cultural change. On the other hand, the fact that divorce has become more widespread and acceptable means that women want to ensure financial stability in case of a breakdown in the marriage, which in turn encourages them to stay in the workforce and discourages them from taking breaks to have children—that’s changing incentives. These two sorts of explanations are not mutually exclusive. But what they have in common is that a demographic outcome is a result of changing views on the good life.

And the result? According to Goldstein et al. (2009), in 2002 about 700–900 million people lived in areas with total fertility rates below 1.3 (that is, based on birth rates that year, women would have 1.3 children on average), including many countries in Europe, most of developed East Asia, as well as anywhere between 6–12 provinces in China.

But how about looking at things in reverse? What I mean is, could changing family structures have an impact on value systems? Last Saturday the New York Times carried an article about the disappearance of the liberal Jewish voter bloc—60% of Jewish children in the NYC area live in Orthodox Jewish homes, which means that in a generation they will form a large voting bloc. In that piece, Samuel Heilman argues that as Orthodox Jews gain political influence, they will clash with “American values” (by which he seems to mean liberal-secular values).

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We get the opposition we deserve

“Inter Pares” (among equals) argues that what they call the “Roy Clique” is a threat to Singaporean democracy. This clique is named for the blogger and opposition cause celebre Roy Ngerng, who has allegedly accused the Prime Minister of mismanaging CPF funds, by analogising it to the discredited leadership of City Harvest Church.[1][2] According to Inter Pares, the ‘clique’ have harmed democracy in two ways. Rather than improving political discourse, they have polarised political opinion. And by changing people’s opinions, they may force the real political opposition to reposition themselves. I’ll respond to each of the points in turn. I think the piece reveals a mindset that is so formed in the establishment mould (uncritically accepting ideas about national unity, political polarisation, the function of electoral contestation, and the role of the opposition), that even when it intends to be impartial and critical, it isn’t. (more…)

Singapore’s emerging drug debate

Blink and you’ll miss it, but Singapore’s famously strict drug policy looks like it could be the next area of contestation between social liberals and conservatives. But as in most debates here, this one is marked by tone-deaf responses that don’t really engage each other; it will take time before a taboo topic like drugs is discussed with candour, particularly when all drugs are regarded as so thoroughly and unquestionably a social bad.

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Professor Mahbubani’s $50k homes are only a quick fix

In the midst of the controversy over the NLB it slipped my mind that I’d wanted to respond to Professor Mahbubani’s Big Idea on Saturday. But I came across a takedown of his article earlier today and that reminded me to write. The citations on that piece are excellent and I don’t have much data to add; instead, I wanted to focus on two things in Professor Mahbubani’s piece which may have slipped by a little less noticed.

The first is something on which we agree. There is no way Singapore will be as successful in the next 50 years as it’s been over the last 50. And although he exaggerates how special Singapore’s record is relative to other countries—and even though our median per-individual household income ($2247 monthly) is a far sight from our GDP per capita ($6710 monthly, according to his piece)—it’s true that living standards have improved. This progress is unlikely to be matched because the low-hanging policy fruit has already been harvested, so to speak—we’ve cleared our backlog of people to house, kids to educate and vaccinate, jobs to provide, sanitation to improve, and so on. This sort of unambiguously-good public policy is a thing of the past, and we’ll start to see more trade-offs appearing. Policies will have distributional consequences, favouring some segments of society over others (rich over poor, young over old, and so on). We’ll also begin to disagree on the desirability of policy outcomes (is having more people good or bad?) Because of this, there’s no way our public policies can attract the same sort of public consensus that they have had in the past. And if that’s the case, I believe it to be an argument for greater democratic contestation in Singapore.

The second is something I absolutely disagree with. Professor Mahbubani suggests that Singaporean property developers build cheap housing (homes priced at $50k) in neighbouring countries so that Singaporean families can enjoy space in their living arrangements. Nazi parallels aside (Lebensraum?), here’s why I think it’s a terrible idea:

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As nobody in particular, I object to Dominic Foo’s so-called arguments

Jaxe Pan’s Facebook note here. Dominic Foo’s response here. This piece responds more or less point-by-point to Dominic Foo’s piece, so read it before coming back here. Better yet, read them side by side, since that’s how I wrote this piece.

Background: as you know, last week the NLB withdrew and destroyed some children’s books for homosexual and non-pro-family themes. I’ve been looking desperately for some intelligent defence of the NLB’s actions so I can engage meaningfully with people who disagree. I thought Dominic Foo’s piece might be charitably read to be such a defence. I believe that in a pluralist society, dialogue is important, and I have sought to keep this post civil. Where it does degenerate (in the last paragraph), it does so because I ran out of patience reading convoluted arguments that didn’t add up. I’m publishing this piece not because it’s good writing, but because I spent 6 hours on it and found some interesting evidence on adoption and gay parenting—and evidence is always good.

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‘Censorship’ at the NLB

Update (10  Jul 2014 4:30pm): the books will be pulped, so apparently they won’t even be anywhere in the library.

A few days ago, the National Library Board withdrew two books (And Tango Makes Three, and The White Swan Express) from the library system. The news broke on Facebook on 8 July 2014. According to Kirsten Han, “And Tango Makes Three is about two male penguins who paired up and nursed an egg, while The White Swan Express is a story about children being adopted not just by straight, white families but by gay parents, mixed race parents and even a single mother.” I see two particular areas of concern: whether NLB is indeed “censoring” books or if its actions are limited to withdrawing these two titles from children’s sections, and the lack of availability of books that show children positive portrayals of unconventional family models.

First, the NLB needs to clarify immediately if the books have been withdrawn entirely or just from children’s sections. The overwhelming impression, and the plain meaning of the email from the NLB’s chief librarian (quoted here as part of a Facebook post), seems to be the former. If true, this demonstrates two inconsistencies. Many books with far more “disturbing” content are in our libraries and on our school syllabi. And removing these two books entirely is clearly inconsistent with the libraries’ mission of educating the public. Leaving them available for adult lending only, while a regrettable situation, is a compromise which still allows parents to make choices for their children’s reading. On the other hand, removing them entirely is censorship. Besides, removing the books disregards the views of that segment of Singaporean society which is positive or ambivalent towards non-traditional family structures. Page 42 on this document, which reports results from the Institute of Policy Studies’ Survey on Race, Religion and Language, shows that 24.2% of respondents think that gay adoption is “not wrong at all” or “not wrong most of the time”. This is after being asked, in preceding survey questions, to reflect on their religious views, which I think would tend to bias most respondents towards conservative views. Clearly, if the NLB has withdrawn the books entirely, it is taking sides in a debate that isn’t settled yet.

Second, the NLB should not be passing judgement on what constitutes a family unit. Referring to a reductive notion of a father-mother couple as a “strong pro-family stand” is objectionable because there are and always have been different types of families—biological, adoptive, single-parent, grandparent-headed, even gay. None of these is necessarily better or worse (this article summarises the current state of our understanding of gay parenting). However, the normative judgement embedded in the NLB’s “pro-family” stance has at least two consequences. It stigmatises other family structures, and even the practice of adoption. Moreover, it harms the children who are too young to understand why society disapproves of their parents. These children particularly need positive portrayals of their family structures. Instead, the NLB’s purported “pro-family” stance hurts actual children in real families in the service of an imagined ideal. Let’s think, for a second, about the real harm that might be caused from these books being available to children: A child picks up a book about a cute penguin family (And Tango Makes Three). This child brings the book to their parent, and asks to borrow it. The parent (let’s say) is socially conservative, and scandalised that such a book is available for lending. The parent has to explain why their child can’t read that book—essentially, expose their moral reasoning to an innocent child’s questioning. They have to tell the child why certain kinds of families are unacceptable by their own standards, and justify to them why they think these families can’t be allowed. By removing books like these from the sight of children, all the NLB is helping to do is prevent (or delay) those awkward moments that result when a sanitised, reductive, simplistic moral universe comes into contact with a gritty reality it can’t deal with. The social conservatives are not engaged in a crusade to remove smut from shelves, as they would have you believe. Rather, they are acting to preserve their own worldview and remove anything that might cause them discomfort. Incidentally, I think those people who oppose this move on grounds of censorship are barking down the wrong alley. Censorship does not rouse Singaporeans to anger. What the social conservatives are really working towards is twofold: insulating their worldview from coming into contact with any other, and imposing it on the rest of society. Withdrawing And Tango Makes Three and The White Swan Express from the libraries is much more than just thought-policing. Louis CK has a hilarious joke about talking to children about gay people (warning: it’s Louis CK): http://www.youtube.com/watch?v=eb-JZSyhWSc&t=1m04s