A Widening Gap In Trust

First we heard Lee Kuan Yew say that our declining population woes had nothing to do with his stop-at-two policy. Now we hear Deputy Prime Minister Tharman  Shanmugaratnam declare that the gap between the rich and poor here is not the result of the Government's recent growth strategy. The Gospel accord to S Tharman wants to believe us that "the spike in education levels exacerbated the high inequality". He was speaking at the Academy of Medicine which conferred him a honorary fellowship, not the Academy of Wisdom, or Academy of Blind Faith.

Recall Prime Minister Lee Hsien Loong's take on how a higher Gini coefficient could be even better for all of us. "Supposing the world's richest man, Carlos Slim, comes to live in Singapore. The Gini coefficient will get worse. But I think Singapore will be better off. Even for the lower-income Singaporeans, it will be better."

That's entirely consistent with his father's line of thought. Dismissing the minimal wage as a method to reduce the growing income gap between the rich and poor, Lee Senior had insisted, “Never mind your Gini coefficient. If you don’t have a job you get zero against those with jobs. So our first priority is jobs for everybody.” Others beg to differ.

At the 18 Jan 2013 press conference in Beijing, China's State Council released for the first time the Gini coefficient for the past decade to demonstrate the government’s resolve to bridge the gap between the rich and poor. Despite year-by-year retreat, the Gini coefficient has stayed at a relatively high level of between 0.47 and 0.49 during the last 10 years. "The statistics highlighted the urgency for our country to speed up the income distribution reforms to narrow the wealth gap," said Ma Jiantang, director of the National Bureau of Statistics.

According to the BBC, "A Gini-coefficient of 0.4 is generally regarded as the international warning level for dangerous levels of inequality." Our own academic Lim Chong Yah confirms, "A Gini coefficient of 0.5 is normally considered a danger to breach." Singapore is already mired in the danger zone.

The mainstream media tried to ameliorate the deplorable state by judicious manipulation of statistics. According to TODAY, “Singapore’s Gini coefficient of 0.478 last year, before accounting for Government transfers and taxes, is on a per-household-member basis.” It goes on to argue that “some countries compute their Gini coefficients based on the “square root scale”, and  Singapore’s Gini coefficient is “0.435 if the (modified OECD) square root scale is used” and would be 0.414 after Government transfers and taxes are factored in. Balderdash. If the income gap is a non-issue, why did DPM Tharman have to defend it, and PM Lee leave it out of the National Day Rally speech?