Exclusivity Should be a Two-Way Streak

 

One of the biggest storms in the aftermath of the opening of our new parliament came from the MP for Bishan-Toa Payoh GRC, Mr. Chong Kee Hiong, who suggested Singaporeans be allowed to take two jobs. Mr. Chong’s speech can be found at:

https://www.channelnewsasia.com/news/parliament/videos/september/debate-on-president-s-address-chong-kee-hiong-on-benefits-of-13071436

Mr. Chong, who works as CEO of Suntec Real Estate Investment Trust (Suntec Reit) by day, was pillared for being out of touch with the lives of ordinary Singaporeans. The common theme in the criticisms of Mr. Chong was that he didn’t fully understand what we wanted, which a single and secure job that paid well as opposed to having two jobs. A sample of the reactions to Mr. Chong’s remarks can be found below:

https://www.straitstimes.com/forum/forum-taking-up-2-jobs-does-not-ensure-job-security

While I understand where the objections to Mr. Chong’s remarks are coming from, I actually agree with Mr. Chong. Why do we the workers have to be tied down to a single employer, especially in situations where working lives are becoming increasingly shorter (in the name of being more productive) and pay and other benefits are being reduced (in the name of profitability). Why should employees be forced into an exclusive relationship when their employers are not bound by the same rules?

I make this point as someone who worked two jobs for the better part of five years. I worked for the liquidator by day and I had what is known as a “permanent part-time” gig at the Bistrot. In fairness to both my former employers, they knew that I was working for both jobs. The liquidator gave his express permission for me to keep my part-time gig in the Bistrot and the Bistrot owner knew that I was working in a full-time job during the day.

It was a little tiring to work both jobs in as much as I would finish the office job between six and seven in the evening and only reach the Bistrot by around seven thirty to eight and by the time I was finished with everything I’d only be able to hit the sack at around one in the morning and would have to wake up and leave the house by around 9:15 to get to work at 10 (which was a special privilege that I was granted by the liquidator).

However, working two jobs gave me the benefit of two incomes, which meant that I had the security that I would not be stuck if I didn’t have the other and my virtually nonexistent CPF (Singapore’s national savings scheme and foundation of our pension system) grew quite fast. I also did my best to ensure that both my employers benefited. I tried to entertain at the Bistrot and if I met lawyers at the Bistrot, I’d often get in touch with them to link them up with the liquidator for further business opportunities.

Things only started to go downhill when the demands of my day job were such that I barely had time to work the night job and I was being constantly reminded that the situation of two jobs could not last forever and it was assumed I’d go with the job that provided a clear career path. In the end I left the day job at a point when I was expected to be exclusive to the point of being exclusive.

Now, as I look back, I realise that I was in a very privileged situation in that I had an employer who allowed me to work a second job. While Moonlighting is technically not illegal for people outside the civil service, private companies generally discourage it and often place a clause somewhere in the contract that prohibits it. More on the legal situation of moonlighting in Singapore can be found at:

https://singaporelegaladvice.com/moonlighting-illegal-singapore/

I do understand that there are concerns about conflicts of interest. Employers, particularly in the professional service area, should not want employees in position of leaking information to competitors. However, this exclusion on secondary jobs includes blue collar labour. Why, for example do port operators expect Stevedores to work only in their port or restaurants expect their line cooks to work only for them?

Why is there such a premium placed on exclusivity of employment? Why do I have to depend solely on you for my survival, especially when I’m not exactly a prime decision maker in the organisation? I’ve noticed that employers have this weird obsession with tying down the employee in an exclusive. I remember the reaction of an HR professional for a big bank telling “Oh like that ah,” the moment I told him I was working two jobs. That reaction was “Loser.” By contrast, when I was interviewed by an American, the reaction was “wow – that’s great,” or “hey, you’ve got drive.”

Like it not, the job market is changing. One can either be displaced by someone cheaper, especially when you have places like China and India opening up and offering pools of cheap labour. Or if a job is not killed off by cheaper labour, automation (in manufacturing) or artificial intelligence (AI – the for boring repetitive stuff in the office) will do it. The Singapore government talks about retraining and reskilling. However, in addition to that, they should allow employees to develop alternative sources of income beyond their standard employers.

The rules on allowing dual citizenship should also change. As of now Singaporeans are not allowed to hold dual citizenship. The argument is that Singapore is in a vulnerable geopolitical position and holding dual citizenship would put people in a position of conflict of alliances.

However, we need to look at the fact that we are now living in a different more globalized world than the world of the 1960s. The government has shown that it has no qualms it has no qualms in doing what is necessary to grow its population of new citizens to augment the skills of its current population. So, the reverse question should be asked, why can’t the citizens have two citizenships in case one of them doesn’t work out for them?

Let’s remember that exclusivity only works if it works for both parties. It’s like men who play around yet expect their wives to remain faithful and exclusive to them. How can this work out in the long run?   

How Do You Get the Rich to Pay More?

The most interesting read I had on Labor Day was an article by Warren Buffet for Business Insider. Mr. Buffet who is one of the world’s richest men with an estimated fortune estimated at around USD 73 billion argued that while the billionaire class was not conspiring the screw the world, it was time for taxes to be raised on the very wealthy and that they pay their fair share. The interview with Mr. Buffet can be found at:

 https://www.businessinsider.com.au/warren-buffett-wealth-gap-inequality-solutions-2020-4?fbclid=IwAR33IHdTvozw87jNJ3e7gZMNbUpcI5CTCYanWFUZ0cwriqwoBh_rCSYOnU8

What makes this interview significant is the fact that Mr. Buffet this is the second time that Mr. Buffet is calling for the extremely rich to pay their fair share and he’s challenging the notion that the rich require special protections because they are the ones who create wealth for the rest of us. Back in the Obama Administration (which was an administration that raised taxes), Mr. Buffet wrote a very public letter pointing out that while he paid more in absolute taxes than his secretary, she paid a higher percentage of her income. His made the point that people like him didn’t need the government to give him any special privileges.

What makes Mr. Buffet so unusual is the fact that he’s probably the only known billionaire to call for higher taxes on the rich. If you look at tax systems in advanced economies, you’ll note that most are progressive (the more you earn the higher the percentage) and you’ll note that advanced economies always have loopholes, which the well to do always use. There is the example of Hong Kong where billionaires like Li Ka Shing and Lee Shau Kee paid themselves yearly salaries of US$600 per year because that was taxed. On the other hand, dividends were not taxed and so they received most of their income in the shape of dividends (in the 90s, Lee Shau Kee of Henderson Land apparently earned US$400 million from dividends).

So, the question is what exactly constitutes a “fair” share and how can governments get the rich to pay more. There is a validity to the argument that high taxes scare away the people who get the economy going and punishing the rich policies don’t work and are counterproductive. The UK provided an example. In the 1970s, the Labour Governments raised taxes and the UK had a top income tax rate of 83 percent. The rich fled and the UK economy stagnated. It was only revived in the 1980s when Mrs. Thatcher slashed tax rates down to 60 and latter onto 40 percent.

This example has made governments around the world very weary of “punishing” the rich through higher taxes. In Singapore, our government gets very panicky whenever anyone drops a hint that we should raise direct income tax. The argument that is always used is that this will scare away foreign investors who create jobs and everyone will suffer as a result. One of Singapore’s favourite hobbies is bragging about the number of billionaires who have chosen to settle in Singapore. Think of Dr. BK Modi of Spice Group and Eduardo Saverin, the co-founder of Facebook.

However, the idea that high taxes are detrimental to the economy is also not true. The Nordic Countries are a prominent example. All of them (Norway, Denmark, Sweden, Finland and Iceland) have tax rates that are around 50 percent of your income. Yet, despite all of that, the Nordic Countries with their small populations have very high levels of development, very low levels of corruption (According to Transparency International, theNordics rank in the top ten of least corrupt nations) and have strong and diversified economies driven by advanced technologies. A rough guide to the economies of the Nordic Region can be seen at:

https://en.wikipedia.org/wiki/Comparison_of_the_Nordic_countries#Economy

While the Nordic Countries do have their flaws, one has to ask how they managed to get rich without low taxes or getting the rich to pay more.

The easiest point to make is that taxes, while high are not punitive and there are sufficient loopholes which allow the rich to offset the tax bill but at the same time to do so in a way that benefits the rest of society (start businesses that create jobs etc)

The more important point is that there is a high level of social cohesion in the Nordic countries and for an aspiring entrepreneur understands what he or she is paying for. Taxes are high, but so is the investment in social infrastructure like healthcare and education. The Nordics rank are amongst the best educated and healthiest people in the world. This in turn has helped them to become exceedingly productive. Taxes become not so much a cost but a social investment. My Nordic friends don’t think of their education as free but as paid for through their taxes. For a businessperson, its easier to stomach the idea of paying so much in tax if you know what you’re getting it back through a healthy and productive workforce that in turn is also a well to do customer base.

Social cohesion is the essential ingredient here. Nobody will pay half their income to a government that enriches its top ministers yet leaves its population sick and ignorant. The rich, particularly the industrious rich, did not get that way through stupidity. Rich people are particularly good at looking for value.

Hence, if you want the rich, particularly the type that benefits the rest of society through things like job creation and so on, you need to reexamine social contracts between the governed and the governing classes. The Nordic model has worked thus far because the people paying the taxes trust that the people receiving the taxes will use them in a way that benefits society at large. Nordic model will not work in a corrupt country where the only faith is that you’ll be enriching the man on top. If you want the rich to pay more – look at the social contracts.