When You’re Poor, what’s due to you is a cost

I Got Scammed by a Media Masterstroke.

After expressing my delight that Singapore’s Sunday Times published a news snippet stating that eight out of ten Singaporeans were willing to pay more for essential services if it meant giving the workers more money, I’m now disturbed.

You could say that after a decade of dealing with the news media, I’m getting my just deserts. It’s just dawned upon me that my delight in thinking that my fellow citizens were more kind hearted than I gave them credit for, was in fact a total distraction from the reality. Call it an endorphin shot that distracts you from the fact that you have cancer. It is a PR master stroke that stops you from asking hard questions.

Background to this started in April 2020, when Covid-19 cases started exploding in foreign worker dormitories. Singapore, which before then, had been basking in the international spotlight for its management of the virus, suddenly saw its reputation for basic competence tarnished. Instead of focusing on the “brilliant” job that the government was doing, the focus shifted to the fact that Singapore had an underclass that was being royally screwed.

In fairness to the government, it did act quickly to shut down the dorms and it offered assistance to the migrant workers, who had been screwed by the disease and the ensuring confinement. Instead of focusing on their plight, a good portion of the workers were suddenly given a reason to be grateful to the government. While the government did upset the more extreme elements who felt the government was spending too much tax payer money on ungrateful foreigners, it did take away a motive from the foreign worker population to cause any civil unrest.

The second stroke of genius was to focus on one simple question. This question was “Would you be willing to pay more for services if the wages of the poor and needy were to be increased?” This was done very subtly and it slid in between all the noise about the need to improve conditions for foreign workers and so on.

At the lowest end of the scale you had the likes of the Fawning Follower, who argued that poor living conditions for Singapore’s underclass were in fact good for Singapore (despite the evidence brought by Covid-19). At the more intelligent end of the scale, you had the likes of the CEO of Centurion Corp, who replied to my forum letter on his profit margins. He appeared reasonable, did not “hide” from the obvious, explained that he was doing this and that to make things better and then somehow it was going to costs money and the tax payer would have to pay for it.

This question frames the issue into one of self-interested costs. Think of the various ways in which this has been framed:

1. Yes, we understand that living conditions for Indian and Bangladeshi workers need to be improved – but you do know that it’s going to costs the employers more and they’ll raise prices so your road tax and building maintenance fees will go up; or
2. Yes, poor aunty carrying the trays at the food court only earns $7 an hour for a 12-hour day – but you know,, if you raised her salary to $10 an hour and reduce working hours to 10 hours a day, the stall owners will need to recoup their costs and are you willing to pay $7 for your noodles instead of $4?

When you frame the issue in this manner, even the most well-intentioned person, will think twice. This is especially true if your own wages are barely keeping up with inflation and rising costs. Think about it – nobody wants aunty to slave at the food court of the Thambis to come home to a slum after a day in the hot sun – but it means that I have to pay more …… Sure, its inspiring that people will say that their willing to pay more if it goes to the workers but the counter to that is that is inevitably – since we don’t know the money will go to the workers, why should we risk paying more.

The second problem with framing the debate this way is that it distracts people from the real issue, which is why is the cost structured the way it is.

In my earlier posting “Lucrative Problems,” I made the point that in the case of foreign labour in Singapore, foreign labour is not cheap and the labourer gets paid badly because there are too many parties taking a cut in between the employer and employee. The biggest cut goes into foreign worker levy to the government. This increases the employer’s costs but does not benefit the worker at all.

I’ve also argued in my piece "The Obvious Answer to Cheaper Hawker Food" that the government has the capacity to reduce rents on land that it controls so that businesses keep more of the money they earn. 

If you look at the way the question is phrased, you think it’s just an employer-vs-employee issue. It makes you look at your own pocket without looking at the real issues. Imagine if we took the examples provided and said the following instead:

1. Since foreign workers live in awful conditions, why don’t we reduce the levy and regulate agent fees more, so that the employers and workers have more to spend on better accommodation; or
2. Why don’t reduce the rents at the food court so that the stall owners have more money to pay the cleaning aunties more?

It’s not going to happen because too many powerful parties have an interest in keeping things this way. These parties consider the reduction of the profit margin (take 50 percent instead of 80) as asking them to make a loss. Thus, they’ll fight tooth and nail to keep things the way they are.

However, there is a case to self-interest to be made. If the government took less from businesses and people through hidden levies and rents, it would create higher spending, which in turn would lead to more business activity and tax revenue.

While I’m happy that my fellow citizens are open to having more compassion for the less fortunate, we shouldn’t get distracted from asking real questions and addressing the real issues.