About your landlord…
Today the Department of Statistics issued a press release* stating that the median monthly income from work among resident households had increased by 3.1% in 2010. They state the real increase as being 0.3%. Similarly median monthly income from work for employed households was reported as having risen by 5.7% in nominal terms and by 2.8% in real terms.
I would like to point out that the Consumer Price Index (CPI) was 4.6% higher in December 2010 compared with December 2009 and that if this figure is used median monthly real income for all resident households actually FELL by 1.5% instead of rising as claimed. Also median income for employed households only rose some 1% in real terms instead of 2.8% as claimed.
In my article on inflation I pointed out that the CPI for average and lower income households may diverge considerably because of the greater proportion of the budgets of lower income groups taken up by food, transport and housing. In Singapore’s case the high level of income inequality means that average income is considerably higher than median income and thus the CPI may be failing to track the real erosion in their purchasing power.
So median real incomes for resident households actually fell during a year in which Singapore enjoyed record-breaking growth of 14.7%.
Two hundred years ago already an economist named David Ricardo ** produced a theory where he wrote about how increasing population pressure coupled with lack of technical progress in agriculture would lead to the increasing transfer of wealth to the owners of fixed factors of production, in particular land. This he warned would be at the expense of those who worked on the land who would suffer growing impoverishment. His theory gained much credit as indeed this turned out to be the situation in China and India and elsewhere for several centuries before industrialisation and land reform.
This government’s policies seem to be aimed at recreating the conditions and events that prompted Ricardo’s theory. Are we in fact living through some form of Ricardian experiment in modern day Singapore. We already have the increasing population pressure he spoke of and the lack of technical progress in agriculture is, in modern terms, our poor productivity. The only noticeable difference is that the principal landlord is the government.
These policies need to be reversed because they are clearly not in the interests of most Singaporeans