How Much is this Going to Cost?

 Around a month ago, I got hit with a nasty gout attack that sent me to hospital. The pain was so bad that I was bed ridden to two-days and I needed to call an ambulance in order to get me to hospital. As it turned out, the hospital had a wonderful way of getting my mind of the excruciating pain – they told me that I needed to spend the night in hospital and the mind shifted away from the pain to “Oh God, how much is this going to cost me?” The focus went straight to ensuring that whatever ward the hospital placed me in, it would “NOT” be the exclusive one.

The truth is that health care in Singapore is exceedingly expensive. Even with government subsidies, one needs to consider every visit to the doctor carefully because chances the visit will set one back. I take myself as an example. Even when I had a corporate job that covered out patient costs, I made it a point to go to the polyclinics whenever I needed medical attention. The reason was and remains simple – polyclinics come with a government subsidy and although I’m all for supporting SME operations, taking the government subsidy is the only way I’ll be able to afford to get myself treated.

Unfortunately, healthcare is not the only thing that is expensive in Singapore. Houses and cars for example are a racket. I think of the shock that American relatives had when I told them that a million dollars was government subsidized housing. A million in America outside Beverly Hills and downtown Manhattan is a mansion. As for cars, we are probably the only place on the planet where one has to buy a piece of permission to buy a car (excluding import duties and so on), which costs as much as the car itself.

Houses and cars are just the tip of the ice berg. The Lee Kuan Yew School of Public Policy (LKYSPPL) and the Nanyang Technological University (NTU) conducted a study that found that a couple of with a teenager and pre-teen, need a household income of $6,426 a month:

https://www.straitstimes.com/singapore/politics/family-of-four-needs-6426-a-month-for-basic-standard-of-living-in-spore-says

 

A sample of the costs of living in Singapore can be found at:

https://www.numbeo.com/cost-of-living/in/Singapore

 

It’s no secret that the costs of living in Singapore are high. According to the 2020 World Economic Forum report, Singapore is the 14^th most expensive city in the world, ahead of famously expensive cities like New York and Osaka.

https://www.weforum.org/agenda/2020/11/world-most-expensive-cities-covid-paris-zurich-singapore/

 

In a way, the high cost of living in Singapore should not come as a surprise. We are a regional financial centre of a growing economic region. We are a small, crowded and prosperous place. So, it does without saying that things are going to be expensive.

However, the real issue is not so much that the city is expensive. The real issue, as stated in the Straits Times article is the fact that 30 percent of working households in Singapore cannot afford it. That’s just the lot that can’t afford it. The study doesn’t mention those who are “just getting by” nor does it go into detail as what people have to do to get by. The problem is not so much that Singapore is not expensive but whether Singapore is too expensive for Singaporeans. Monaco is famously expensive but its residents aren’t struggling to make ends meet.

Given Singapore has reached the stage of being famously expensive, one then has to ask how is it such that the government has been famously resistant to implementing a “minimum wage” and only recently took the position that firms would need to hire Singaporeans on no less than $1,400 a month. If you look at the numero.com report, it states that a single person in Singapore would need $1,338.16 without paying rent just to survive. This turn would mean that a low wage earning, with a minimum salary of $1,400 (before the 20 percent employee deduction) would not be able to meet the minimum cost of survival in Singapore.

So, what can be done? The usual refrain from the government is that it is moving away from its “non-welfarism” roots and subsidizing basic costs for things like housing. However, whilst there are times when subsidies may be necessary, that doesn’t come to the root of the issue. As Chinese medicine practitioners are prone to tell us – we need to treat the cause rather than the symptoms of the problem.

Let’s look at our wage structure. How can lower wage workers keep enough of his or her salary to survive and at the same time prepare for the future? Or, if one cannot earn a certain sum from one employer, what are the other avenues that one can take to earn extra. These are the questions that the authorities need to ask if the authorities want to ensure that Singapore does not become too expensive for Singaporeans.