Rajiv Chaudhry on Ministerial Pay- missing the point.

Missing the point.
Your fundamental point that it is wrong in principle to peg minister’s salaries to private sector earners is correct.

Both the committee on ministerial salaries and other opposition parties who are focusing on salaries of political leaders in other countries are missing the point. The committee can be forgiven, to an extent, because their terms of reference required a correlation with private-sector salaries (an example of starting a race with a handicap). Those calling for a relationship with salaries of politicians in other countries are also missing the forest for the trees both because the situation in each country is unique to its own circumstances and also because knowing the correct salaries can be problematic, given the many hidden perks that go with the jobs.

Singapore’s situation is unique to itself. Arguably the correct way to concentrate (political) minds is to prescribe salaries as multiples of the median wage. The existing (pre-adjustment) top political salaries at $4 million plus (the actual figures will never be known, given that we are not privy to the bonuses paid out) are at least 110 times the median figure, assuming the latter at $36,000 a year (a generous estimate, on average).

Again, arguably, the goal of development should be to move towards a more egalitarian society. In this respect, it may be noted that in the Nordic countries, generally regarded as the most egalitarian societies on the planet, top-earners among the salaried class earn a multiple of three times that of the bottom. In other words, a CEO of a typical company earns three times what a fresh graduate, joining the company, would earn. This sounds extraordinary in the Singapore context but is true (of course, general education levels are also much higher in these societies).

As a starting point, top political salaries (those of the President and Prime Minister) could be pegged at, say, 50 times the median wage, with a commitment to bring the multiple down in stages over a 10-20 year period. This would give a new top salary of $1.8 million with corresponding adjustments all the way down the civil service. This, to use your phrase, would provide the most powerful incentive available, a direct correlation with ordinary citizens wages, to raise the median income of Singaporeans.

Of course, there are not many examples in history of dominant groups voluntarily reducing their wages. The solution, as with many other things in Singapore, will no doubt come through the ballot box.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s