Ong Ye Kung flags stratification 'poison'

In recent years, concerns about a class divide had grown, Education Minister Ong Ye Kung acknowledged, and there had been a perceptible reduction in social mixing in recent years.
In Parliament yesterday, Mr Ong identified four dimensions in defining inequality: social mixing; the extent of the income gap; whether there is a strong middle-income core; and whether there is mobility, especially from the bottom upwards. Median ho
Median household income grew by 3.4 per cent in Singapore between 2006 and 2016. But it could be more challenging for many middle-income families to do better, given the high base that society is at now, said Education Minister Ong Ye Kung.PHOTO: LIN ZHAOWEI FOR THE STRAITS TIMES
In Parliament yesterday, Mr Ong identified four dimensions in defining inequality: social mixing; the extent of the income gap; whether there is a strong middle-income core; and whether there is mobility, especially from the bottom upwards. Median ho
In Parliament yesterday, Mr Ong identified four dimensions in defining inequality: social mixing; the extent of the income gap; whether there is a strong middle-income core; and whether there is mobility, especially from the bottom upwards.PHOTO: GOV.SG/YOUTUBE

We can and will do better to boost social mixing, says minister

Education Minister Ong Ye Kung has raised the spectre of a poison creeping into Singapore society and its name is: social stratification.

Already, there has been a perceptible reduction in social mixing in recent years, he said, citing a recent Institute of Policy Studies study.

"We can do better, and we should and we will," he pledged.

Social mixing - whether different groups interact with one another - is one of four dimensions that Mr Ong yesterday identified in defining inequality.

The rest are: the extent of the income gap; whether there is a strong middle-income core; and whether there is mobility, especially from the bottom upwards.

With charts and data, he delved into each dimension in turn to make the point that while Singapore's situation with inequality is not too dire compared with some other countries, steps need to be taken to tackle it now.

On the income gap, Mr Ong said that the top 90th percentile in Singapore earned on average 5.8 times that of a household in the bottom 10th percentile last year.

It is higher than in South Korea and Britain, each of which has a ratio of less than five, as well as Finland, whose ratio is around three.

But as a city-state, Singapore's ratio is not "out of kilter" when compared with major cities, he said.

Mr Ong also said that income disparity here is being moderated through policies, especially with a progressive tax system. The top 10 per cent of income earners contribute about 80 per cent of personal income tax revenue which, in turn, is redistributed to lower-income Singaporeans through schemes like the Workfare Income Supplement as well as subsidies in education and housing.

As a result, low-income families get about $4 in benefits for every dollar of tax, and the middle-income, $2.

On whether there is a strong middle-income core, Mr Ong cited the Gini coefficient, which measures income inequality from zero to one, with zero being most equal.

Contrary to studies that show gross domestic product growth exacerbates inequality, Singapore's Gini coefficient coincided with periods of growth, like in the 1980s. It dropped from an estimated high of 0.5 in the 1960s to around 0.36 today, after taking into account transfers and taxes.

This outcome is the result of Singapore's model of inclusive growth, he added.

"There is a belief that we share the fruits of success; we all eat from the same rice bowl."

Median household income also grew by 3.4 per cent in Singapore between 2006 and 2016.

But it could be more challenging for many middle-income families to do better, given the high base that society is at now.

"We will still improve, but it will be in steps and not leaps," he said, adding that a better life should not be defined purely in economic and material terms, but from a more holistic perspective, like a more cohesive and caring society.

Social mobility is also high in Singapore, he said, citing a Finance Ministry study which showed 14 per cent of Singaporeans in their 30s, whose parents were in the lowest 20 per cent segment when they were growing up, moved up to the top 20 per cent of income earners.

This is higher than the 7.5 per cent in the US, 9 per cent in Britain and 11.7 per cent in Denmark.

He credited it to Singapore's belief in meritocracy and universal access to education.

Singapore also has one of the smallest proportions of low performers in the Programme for International Student Assessment 2015 test, Mr Ong said. This means it has one of the smallest education underclasses.

Similarly, the housing policy has helped low-income families to own, not rent, Housing Board flats, he added.

However, cracks are starting to show. "Families who did well are able to pass down the privileges to their children, through better coaching, enrichment classes, and exposure to the world. Their children have a head start."

Social stratification is starting to become entrenched, he added, with families who cannot move up despite strong and enhanced support facing circumstances "more dire and challenging than poor families of the past".

On the last dimension, social mixing, Mr Ong cited how more than four in five schools here have a relatively balanced mix of students from different income backgrounds, with at least 5 per cent of their students coming from each of the top and bottom quintiles.

Although Singapore may be in a better situation than many developed countries, "we must keep working at it", he added.

"Our policies will need to work against this trend, to actively bring Singaporeans of all backgrounds together," he said.

A version of this article appeared in the print edition of The Straits Times on May 16, 2018, with the headline 'Ong Ye Kung flags stratification 'poison''. Print Edition | Subscribe