Trim excessive wage to improve wealth distribution

I agree with Mr Aw Chon Wai that paying more for hawker food will not increase the income of low-wage workers compared with effectively trimming "excessive wage" from top earners (Paying more doesn't solve income inequality; Dec 6).

It is embarrassing that Singapore is ranked the second-most unequal society despite being the world's eighth richest.

If we aspire to be an egalitarian society we need to eliminate the long list of targeted social assistance schemes to help the poor and low-income households under various ministries.

Singapore over-rewarded capital and under-rewarded labour during repeated economic restructuring that altered the socioeconomic landscape. The country changed to a high-wage policy in the early 1980s but unfortunately, the rising tide did not lift all boats.

Wage redistribution policies were skewed towards educated top-earners, judging by the ratio of top quintile earnings being 11.8 times more than the lowest quintile earnings. In rich countries, the ratio is no more than 4.5 times.

The high-wage policy has created a different mindset and distorted perception of affordability among low-income households. Paying $15 for ramen is not a problem for those who earn $12,000, but $3 wonton mee is too expensive for cleaners earning $1,200.

I can't find any difference in the scope of work of cleaners in Switzerland and those in Singapore but the Swiss pay cleaners about $3,800 a month based on equitable wealth redistribution policies.

Professor Linda Lim of the University of Michigan was right in saying that Singapore possesses many features that discourage more redistributive policies of wealth to reduce inequality.

Direct salary earning is clean wage, better than the Workfare Income Supplement scheme and social welfare programmes because state handouts accord very little dignity.

"Treat a janitor with the same respect as the CEO" is the fundamental work ethic for wealth redistributive policies in an organisation. Hence we need to turn the tables to ameliorate the situation and reduce income inequality. It is justifiable to trim excessive remuneration from top-earners to increase payment for rank-and-file colleagues.

Paul Chan Poh Hoi

A version of this article appeared in the print edition of The Straits Times on December 18, 2018, with the headline 'Trim excessive wage to improve wealth distribution'. Print Edition | Subscribe