Explainer: Inequality in Singapore

Inequality is a growing problem in Singapore, threatening the country’s social stability. Despite the government’s focus on handling structural inequalities, there are concerns that policies may not reflect peoples’ actual experiences. The government’s focus on economic growth and individual accountability may overshadow structural issues.

Sharply rising levels of inequality are a global problem with profound consequences. Higher inequality correlates with greater societal conflict. Singapore is no different. Rising inequality, combined with sharp rises in the cost of living, is destabilising a country where social stability is particularly prioritised by the government. 

Singapore’s political leaders recognise this. Laying out the government’s priorities at the opening of the second session of the 14th Parliament on 10 April 2023, President Halimah Yacob stated that entrenched structural inequality would be a priority of the government: “While meritocracy has long been the ‘organising principle’ of Singapore society, the Government needs to rethink its approach to education and work so that advantages and privileges do not become entrenched and persist over generations,” she said.

This has been a priority of the People’s Action Party government since at least 2018, when Prime Minister Lee Hsien Loong observed that if widening income inequalities were allowed to create “a rigid and stratified social system”, “Singapore’s politics will turn vicious, its society will fracture, and the country will wither”. 

But while there is consensus that inequality is a problem, there is far less consensus on how to deal with it.

In particular, the PAP government is focused on specific ways of measuring and dealing with inequality and tackling it. These are disconnected with how inequality is lived and felt among the people of Singapore, and also based on a set of values which are problematic.

This Explainer seeks to understand the state of inequality in Singapore, and in particular the values and assumptions which shape how inequality is perceived by policymakers vs the general public. In particular, this article identifies looks at the state of inequality in the last two decades to identify four interconnected issues which undermine the PAP government’s attempts to tackle inequality: First, a disconnect between policies and the lived everyday experience of inequality; second, a focus on economic growth as the key factor in measuring inequality; third, a prioritisation of social stability; and fourth, a continued insistence on personal responsibility over structural factors in causing inequality.

What is inequality, and why does it matter?

Inequality refers to differences or disparities between individuals or groups in terms of opportunities, resources, and outcomes. These differences can be economic, social, political, or all of the above. Inequality can be dangerous for various reasons, impacting societies and individuals on multiple levels. Some of the key types of inequality and why they are dangerous include:

  1. Economic/class inequality: High levels of income and wealth inequality can lead to economic instability, as it concentrates resources in the hands of a few. This can result in reduced consumer demand, underinvestment in public goods, and increased likelihood of financial crises. Inequality can negatively impact the health and well-being of individuals, especially those in lower socioeconomic groups, who struggle to access healthcare. Inequality can also reduce opportunities for social and economic mobility, making it harder for individuals from disadvantaged backgrounds to break the cycle of poverty. This can perpetuate inequality across generations and limit the potential for economic growth and development. It can also contribute to environmental degradation, as it can lead to overconsumption and waste by the wealthy, while the poor may have limited access to resources and opportunities for sustainable living.
  2. Social inequality: Inequality can erode social cohesion and trust, as it can create a sense of unfairness and division between different groups of people. This may lead to increased social unrest, crime, and political polarisation. Inequality can limit access to quality healthcare, education, and other essential services, leading to a lower quality of life and reduced life expectancy.
  3. Political inequality: Inequality can distort the democratic process, as it often leads to a concentration of power and influence among the wealthy. This can result in policy decisions that favour the interests of the few over the many, perpetuating and exacerbating existing inequalities. High levels of inequality, both within and between countries, can also contribute to global instability. As the pandemic has shown and the climate crisis is demonstrating, inequality between countries can cause massive healthcare problems, social unrest, and geopolitical tensions, including conflict over resources and migration.

Addressing inequality is crucial for promoting social and economic development, as well as fostering a more just and stable society.

To do so, we must identify and understand its causes, as well as implement policies and practices that promote greater fairness, equity, and inclusion in a holistic manner that addresses all the forms of inequality.

How unequal is Singapore?

What is the actual state of inequality in Singapore? First, the conventional measure of inequality is Gini coefficient, which measures the inequality among values of a frequency distribution, such as levels of income. A Gini coefficient of 0 reflects perfect equality, where all income or wealth values are the same, while a Gini coefficient of 1 (or 100%) reflects maximal inequality among values.

Gini Coefficient

Figure 1: Gini Coefficient of Per Capita Household Income among Employed Households. Source: Singapore Department of Statistics, https://tablebuilder.singstat.gov.sg/table/CT/17806

Inequality as portrayed by Gini coefficient was relatively stable between 2000 and 2022. The Gini coefficient before accounting for taxes and governmental transfers increased from 0.442 in 2000 to a peak of 0.482 in 2007, before declining to 0.437 in 2022. After accounting for taxes and transfers, the Gini increased from 0.414 in 2000 to a peak of 0.439 in 2007, before sliding to about 0.380 over the last two years. It should be noted that the 2020-22 data does reflect significantly increased public welfare support due to the pandemic. Overall, however, income inequality has been falling slowly.

Figure 2: Percentage Change in Gini Coefficient Due to Government Taxes and Transfers. https://tablebuilder.singstat.gov.sg/table/CT/17806
Figure 2: Percentage Change in Gini Coefficient Due to Government Taxes and Transfers. https://tablebuilder.singstat.gov.sg/table/CT/17806

The PAP government clearly recognised and responded to the changes in Gini. The effect of government transfers and taxes essentially doubled since 2000, reflecting increasingly progressive taxation and transfers from the government. Government taxes and transfers have reduced inequality from around 6.3% in 2000 to a high of 17% in 2020 (the first year of the pandemic, so probably an outlier).

Overall, net inequality as measured by Gini coefficient rose from 2000 to 2012, but progressive transfers and taxes stabilised it. The watershed election of 2011, where the PAP suffered an unprecedented loss of Aljunied Group Representation Constituency, and the PAP’s response to it, helps explain why inequality as measured by Gini coefficient peaked in 2012.

But there is one major caveat: Singapore’s official Gini coefficient does not include all the people actually in the country. The Department of Statistics’s Gini data is for “resident employed households”: “A resident employed household refers to a household where the household reference person is a Singapore citizen or permanent resident, and with at least one employed person.” This excludes households with no employed people (for example, retirees). It also excludes households that are entirely foreign, including those on Employment Passes (professionals who generally earn high wages, at least S$5,000 a month) and foreign workers (such as construction workers and domestic workers, who earn low wages (between S$250-S$1,000 a month). If they are included, it is likely the Gini coefficient would be significantly higher.

Our Gini coefficient is falling. Does it mean inequality is falling?

Gini coefficient is only one way of measuring inequality. To get a better idea, let’s look at another standard way.

Income Inequality

Figure 3: Average Monthly Household Per Capita Income (Top Versus Bottom 10%), 2000–18. Source: Singapore Department of Statistics, https://tablebuilder.singstat.gov.sg/table/CT/17803
Figure 3: Average Monthly Household Per Capita Income (Top Versus Bottom 10%), 2000–18. Source: Singapore Department of Statistics, https://tablebuilder.singstat.gov.sg/table/CT/17803

The income ratio of the top 10% versus the bottom 10% increased significantly from 2000 (18.4) to 2012 but stabilised around 24 times from 2013 to 2020—i.e. the richest 10% in Singapore make around 24 times the poorest 10%—before sliding down 20.8x during the pandemic.

Figure 4: Real Household Per Capita Income Change, by Decile, 2000–18. Source: Singapore Department of Statistics
Figure 4: Real Household Per Capita Income Change, by Decile, 2000–18. Source: Singapore Department of Statistics, https://tablebuilder.singstat.gov.sg/table/CT/17803

In terms of real (i.e. inflation adjusted) change in household income per person from 2000 to 2022, the bottom 10% increased 46.2% and the top two deciles increased 90.5% and 77.9%, respectively. 

But why is this not reflected in the Gini? Remember that Gini measures inequality among a frequency distribution. When we look at figure 4, we realise that the income increase of the 3rd to 8th decile (i.e. the top 80% of the country) have comparatively similar growth in income (around 80-85%), and the 9th decile has an increase of over 90%. This is higher than the top 10%, and therefore Gini decreases. But look the bottom 20%. They are really struggling, and especially the bottom 10% is being left behind.

Again, the same caveat: “A resident employed household refers to a household where the household reference person is a Singapore citizen or permanent resident, and with at least one employed person.” It does not include households with no employed people, and who are entirely foreign.

In other words, Gini is a useful number, but it can also really skew how we understand inequality. We need other ways of measuring inequality to reflect how people are actually experiencing inequality.

So income inequality is actually worse than Gini tells us. What are better ways to measure inequality?

What’s a better way? There’s no “best” way, but here are a few other indicators.

Consumption Inequality

Consumption inequality is when some people have access to more goods and services than others (i.e. rich people can afford to buy more things, but how much more things?). This can include things like housing, food, healthcare, education, and leisure activities. It is measured by looking at how much people in different income or social groups consume (buy) and can help us understand how equal or unequal a society is.

Consumption inequality is often seen as a more accurate measure of inequality because it takes into account factors that are not reflected in income, such as changes in the value of assets, government transfers, and access to credit. For example, a household that has a high income but large debts may not be able to consume as much as a household with a lower income but no debts.

However, measuring consumption inequality accurately can be challenging because it requires detailed data on household consumption patterns, which can be difficult and expensive to collect. But this is less of a problem in Singapore. In Singapore, consumption inequality is measured using the Household Expenditure Survey (HES), making the data less prone to potential under-declaration as in the case of income or wealth data from taxation. It is not directly comparable with the income data, however, because it does include households with no income. For HES, a resident household is defined simply as “Resident households refer to households headed by Singapore Citizens or Permanent Residents.”

Figure 5: Average Monthly Expenditure Per Capita, by Income Quintile. Source: Household Expenditure Surveys, Singapore Department of Statistics, https://tablebuilder.singstat.gov.sg/table/CT/16450
Figure 5: Average Monthly Expenditure Per Capita, by Income Quintile. Source: Household Expenditure Surveys, Singapore Department of Statistics, https://tablebuilder.singstat.gov.sg/table/CT/16450
Figure 6: Ratio of Average Monthly Expenditure Per Capita, Top versus Bottom 20%. Source: Household Expenditure Surveys, Singapore Department of Statistics, https://tablebuilder.singstat.gov.sg/table/CT/16450
Figure 6: Ratio of Average Monthly Expenditure Per Capita, Top versus Bottom 20%. Source: Household Expenditure Surveys, Singapore Department of Statistics, https://tablebuilder.singstat.gov.sg/table/CT/16450

The ratio of expenditure of the top 20% versus the bottom 20% increased from 3.53 in 2002/03 to 3.78 in the 2007/08 report, before decreasing to 3.12 in 2017/18 (the most recent year that data is available). Increases in expenditure were observed for all income quintiles (blocks of 20%) across the board. This suggests consumption inequality is less severe than income inequality.

Wealth inequality

Wealth inequality is a measure of the unequal distribution of how much people actually own. It looks at assets or net worth among individuals or households. Wealth includes all assets that have value, such as money, property, stocks, and bonds, minus any debts or liabilities owed. Unlike income inequality, which measures the unequal distribution of income earned by individuals or households, wealth inequality takes into account not only current income but also past savings, investments, and other accumulated assets. Inequality in wealth can limit opportunities for upward mobility, increase social and economic stratification, and contribute to the concentration of economic and political power in the hands of a few.

Figure 7: Wealth GINI Coefficient. Source: Credit Suisse Global Wealth Database (2010–21), https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html
Figure 7: Wealth Gini Coefficient. Source: Credit Suisse Global Wealth Database (2010–21), https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html

Wealth inequality has risen steadily, especially compared to Hong Kong, Taiwan, and other comparable East Asian countries. In absolute terms, the wealth Gini coefficient is consistently higher than the income Gini coefficient. In other words, wealth in Singapore is increasingly concentrated in fewer hands.

If you’ve read everything in the previous sections, then you’re probably asking if this is based on household wealth and how “households” are defined. Good job paying attention! Credit Suisse does not think households are a good unit for analysis (read their report to understand why) and actually looks at the wealth held by individuals aged 20 years old and above.

Let’s take a look at two things which are very visible and commonly used proxies for wealth: luxury cars and private housing. There are two interesting trends here. The first is that the share of luxury cars out of total cars has drastically increased in this period.

Figure 8: Share of Luxury Cars (Aston Martin, Bentley, Ferrari, Lamborghini, McLaren, and Rolls Royce)  in the Car Population. Source: Land Transport Authority, Singapore. “Annual Car Population by Make”. Data.gov.sg. https://data.gov.sg/ dataset/annual-car-population-by-make
Figure 8: Share of Luxury Cars (Aston Martin, Bentley, Ferrari, Lamborghini, McLaren, and Rolls Royce)  in the Car Population. Source: Land Transport Authority, Singapore. “Annual Car Population by Make”. Data.gov.sg. https://data.gov.sg/ dataset/annual-car-population-by-make
2000 (%)2019 (%)% Change
Home Ownership Rate Among Resident Households9289.3-2.7
    Total HDB Dwellings93.190.9-2.2
        HDB 1- And 2-room Flats19.340.621.3
        HDB 3-room Flats96.193.8-2.3
        HDB 4-room Flats9895.9-2.1
        HDB 5-room And Executive Flats98.596.8-1.7
    Condominiums & Other Apartments80.881.91.1
    Landed Properties89.890.70.9
    Other Types Of Dwelling56.159.73.6
Figure 9: Singapore Home Ownership Rate by Type of Dwelling. Source: Singapore Department of Statistics, https://tablebuilder.singstat.gov.sg/table/TS/M810401

The second is that ownership of 1- and 2- room HDB flats has significantly increased. This is likely due to the 2-room Flexi Scheme introduced in 2015 to allow seniors and other specific groups to own 2-room public housing units, and this is borne out by the numbers. From 2000-2014, ownership of 1 and 2 room flats is around 18-23%; from 2015, it shoots up to 33.9% and keeps growing from there. At the same time, the price of HDB flats has increased by 64%, outpacing the price of comparable (non-landed) private property, which increased by 50% in this period. The price of landed property, meanwhile, has gone up by a whopping 69%. 

HDB Resale Price IndexPrivate Residential Property Prices – LandedPrivate Residential Property Prices – Non-landedAll Private Residential Property 
2000 Q1-2019 Q464%69%50%55%
Figure 10: Singapore Nominal Changes in Property Prices, Q1 2000 to Q1 2020, by Residence Type. Source: Urban Redevelopment Authority and Housing and Development Board, from data.gov.sg. https://data.gov.sg/dataset/private-residential-property-price-index-by-type-of-property and https://data.gov.sg/dataset/hdb-resale-price-index

Singapore’s housing is very complicated, and it’s difficult to generalise from limited data, but it’s clear that people are buying smaller HDB flats and that HDB prices are rising significantly faster than similarly-sized private flats. Given the sensitivity and centrality of housing to Singapore’s social stability and national identity, any perception that HDB flats are increasingly unaffordable portends social instability.

Intergenerational inequality

Intergenerational inequality refers to disparities in opportunities, outcomes, or well-being between different generations within a society, particularly between parents and children. Intergenerational inequality can be influenced by a wide range of factors, including economic, social, and political conditions.

One common measure of intergenerational inequality is social mobility, which refers to the degree to which individuals can move up or down the economic ladder compared to their parents. High levels of social mobility suggest that individuals have a greater chance of achieving economic success regardless of their family background, while low levels of social mobility suggest that family background plays a more significant role in determining one’s economic prospects.

Intergenerational inequality can also be influenced by disparities in access to education, healthcare, housing, and other resources that can affect one’s opportunities and outcomes over the course of their life.

Given those relative incomes can fluctuate, and households shift from being in one income decile to another within the same generation, information on intergenerational mobility is arguably the most informative indicator of Singapore’s ability to provide equal opportunity for all, regardless of background.

How good is intergenerational mobility in Singapore? 

Figure 11: Percentage of Children Born to Parents Earning the Lowest 20 percent of Income Who Reached the Top 20 percent of Income. Source: Ministry of Finance (2015).
Figure 11: Percentage of Children Born to Parents Earning the Lowest 20 percent of Income Who Reached the Top 20 percent of Income. Source: Ministry of Finance (2015). 

In 2015, Singapore’s Ministry of Finance (MOF) released a paper that included a rare analysis of the state of intergenerational inequality in Singapore. The paper looked at children born 1978-82. It concluded that Singapore’s proportion of children born to the poorest 20% of parents who later reached the top 20% of income and compared it to other developed nations like the USA, UK, Denmark, and Canada. The MOF found that Singapore’s was the highest, at 14.3%. This was almost double that of the United States’ at 7.5%. Their mobility was roughly the same as Singaporeans born 1969-73.

However, context matters. The report noted that “the relatively high mobility estimates for Singapore likely reflect the rapid economic transformation that occurred during the period when these cohorts grew up. During the 1980s and 1990s, Singapore’s rapid transformation was accompanied by a significant expansion.” Thus, as “the pace of Singapore’s development slows, it will be an increasing challenge to sustain such mobility in the future” (Ministry of Finance 2015).

In other words, Singapore has historically had good intergenerational social mobility because we were developing from a lower base. As a poorer country to start, naturally, there were far greater opportunities in the course of our development compared with countries like the USA, UK, Denmark and Canada.

Thus, the report shows that in terms of intergenerational income mobility, Singaporeans in their 40s and 50s today have seen higher mobility compared to other countries.

But what of our children?

Educational inequality

Educational inequality refers to disparities in access to quality education, educational resources, and academic achievement between different groups of students based on factors such as socioeconomic status, race, ethnicity, gender, or geographic location. These disparities can affect students’ opportunities, success, and overall life outcomes, perpetuating social and economic inequality.

Education has played a central role in Singapore’s development and continues to be a cornerstone of how we address inequality. One reason why Singapore’s students feel so much pressure in the educational system is precisely because of how influential their results are to their future prospects. As such, how different groups experience the education system disproportionately influences how Singaporeans feel about the level of inequality and how meritocratic the system truly is in ensuring intergenerational mobility.

In terms of absolute educational outcomes, Singaporean students have consistently ranked top in mathematics and science performance in the Programme for International Student Assessment (PISA). However, PISA’s index of economic, social, and cultural status (ESCS) found that Singapore students were the fourth most likely to perform worse due to disadvantages in economic, social, and cultural status relative to non-disadvantaged students. 

Why does this happen? The report noted that while the lack of disadvantage did not guarantee higher performance scores, it did provide a “floor” where students from better-off families do not fare too poorly. In the words of the report, Singapore’s system is one where “socio-economic advantage acts more as a protection against low performance than as a springboard to high achievement”.

This appears to disagree with the stable intergenerational mobility data shown earlier, but remember that the previous data was from the 1980s and 1990s. This data is from 2016. It’s not just likely a better reflection of the contemporary state of intergenerational inequality, but is in line with the MOF’s report that mobility will fall as Singapore becomes more developed.

The explanation lies in Singapore’s infamous tuition classes (supplementary lessons offered by the private sector). It is a pervasive practice in Singapore for parents to send their children for such classes outside of school with the primary goal of improving examination scores.

 Income QuintileAverage
 1st – 20th21st – 40th41st – 60th61st – 80th81st – 100th
HES 02/03S$25.8S$54.6S$86.2S$110.1S$138.9S$83.1
HES 07/08S$28.5S$59.4S$60.8S$81.9S$102.8S$66.7
HES 12/13S$33.9S$68.3S$107.3S$144.1S$174.9S$105.7
HES 17/18S$45.3S$75.8S$121.2S$152.6S$167S$112.4
% Increase from 02/03 to 17/1875.6%38.8%40.6%38.6%20.2%27.2%
Figure 12: Average Household Monthly Expenditure on Private Tuition and Other Educational Courses (S$). Source: Singapore Department of Statistics. https://tablebuilder.singstat.gov.sg/table/CT/16629
Figure 12a: Average Household Monthly Expenditure on Private Tuition and Other Educational Courses (S$). Visualisation of Figure 12, above.
Figure 12a: Average Household Monthly Expenditure on Private Tuition and Other Educational Courses (S$). Visualisation of Figure 12, above.

The socio-economic disadvantage as suggested by the PISA index, is borne out by the stratification in tuition spending. The top 20% of households consistently spent more on tuition and other educational courses. Furthermore, the ratio of this difference between the top 20% to the bottom 20% decreased from 5.4x in the 02/03 report to 3.7x in the 17/18 report. In total, the tuition industry almost doubled in size from 2002/03 to 2012/13 from around S$782 million a year to S$1.475 billion, and households are all spending more on tuition, but poorer households have to spend a greater percentage of their income. The richest households naturally spend the most in absolute terms, but there are only 24 hours in a day, and there’s only so much time a child can spend studying, so there is (thankfully) an upper limit on how much tuition a child can do.

Please summarise: Just how unequal is Singapore?

Inequality by macro indicators like Gini Coefficient and income inequality show that, overall, economic inequality is high, but stable and slowly decreasing due to progressive taxation and transfers from the government. Income inequality does show that the bottom 20% of Singaporeans are significantly falling behind.

But when we try to look at inequality in other ways, we begin to discern that people do feel and experience inequality in ways which may not be captured by the standard macroeconomic indicators. On those measures, inequality has been getting worse. Here are some examples we can draw from the above data:

  • The unequal distribution of wealth held by people in society is consistently higher than income. This is more visible than income because while we usually don’t know how much other people earn, we can see that there are more luxury cars in the street, and often hear and read about how the prices of property are shooting up.
  • By the PAP’s own studies, educational inequality has been getting worse. Education is a key factor in social mobility in Singapore and with the doubling in size of the tuition industry, parents are paying more for tuition, or paying for more tuition, or both; students may feel that they have to spend more time having tuition. Parents may also recall how they were able to compete in the 1980s and 1990s without tuition or with minimal tuition, but their children have to spend a lot of time studying just to keep up.

Ultimately, it is not the overall state of inequality that matters but the lived everyday experience of inequality. People feel that life is getting more unfair and unequal. For those issues, no amount of data indicating that inequality is stable can overcome feelings of unfairness and assuage people’s anger.

What has the PAP done to tackle inequality?

The rising inequality indicators, popular discontent and anger at government elitism—epitomised by the infamous Wee Shu Min elitism controversy in 2006—capped by the watershed 2011 election, where the PAP lost six seats, including a Group Representation Constituency (Aljunied) for the first time, led the PAP to respond. 

It changed its rhetoric and narrative around elitism, where it previously had justified elitism as being a natural consequence of meritocracy. It has also increased social support policies, instituted more employment and immigration regulations to ensure lower-skilled workers had better prospects and incomes, and gradually increased early childhood education subsidies, social support and healthcare coverage.

These policy responses may be summarised as follows:

First, expanded social welfare programmes, including increasing the amount of money spent on social welfare through all the various programmes, along with the creation of a dedicated endowment fund for social programmes (the Community Care Endowment Fund). However, by any international comparison welfare spending remains low, despite the strength of the national budget and the city-state’s considerable financial reserves.

Second, supplementing the incomes of lower-wage Singaporeans in specific industries. Workfare Income Supplement (WIS), introduced in 2007, has two components—cash is 40%, and the other 60% goes into workers’ CPF accounts. It aims to subsidise incomes but also bolster lower-income workers’ funds for retirement and medical needs. But this does not significantly close the income gap and may also lead to perverse incentives where employers might decide to lower salaries or limit increases.

Singapore has no minimum wage. Instead, the Progressive Wage Model (PWM) targets specific sectors—namely, the cleaning, security (as in civilian security for facilities protection), and landscaping industries—where lower-income Singaporeans are concentrated. It sets out different job tiers within each sector to help foster progression and specifies the minimum income for these.

Third, reduced competitive stress in the education system and reduced opportunities for richer families to gain an early advantage in the education system. After 2011, the government adopted more compassionate narratives and emphasised multiple pathways to success. The number of high-stakes examinations and rankings has been reduced.

Fourth, making the taxation system more progressive. The Goods and Services Tax (GST) has exacerbated inequality. To counter this, the government has introduced a number of schemes, including absorbing the GST for public education and healthcare and implemented the Permanent GST Voucher (GSTV) scheme in 2013 to provide cash and utilities rebates for lower-income Singaporeans, top-ups to medical savings accounts (MediSave) for the elderly, and other benefits. But GST rates have been raised this year and will do so again next year, to 9% in 2024.

There have also been more efforts to make the income and property tax structures more progressive—e.g. personal income taxes for top income brackets increased in 2015, with a cap on tax reliefs introduced the following year; increasing tax relief for working mothers with special needs children; more progressive property taxes.

As seen in the falling Gini coefficient, this has worked. There has been a positive impact on inequality. The PAP today talks a good talk about inequality—but what do its policies actually tell us about how it sees the issue? 

What does this tell us about how the PAP sees and addresses inequality, and what are the problems with its values and assumptions?

These policies help us understand the fundamental assumptions behind the PAP’s policy-making and the trade-offs they have chosen to make.

Inequality is seen primarily through an economic lens

First, economic growth is what the government perceives as the best way to address inequality. The PAP’s historic priority was, and remains, economic growth. A rising tide that lifted all boats allowed the PAP to address inequality in the 1960s and 70s, and they continue to frame it as such today. Singapore’s first Prime Minister, Lee Kuan Yew, wrote in his memoirs that the PAP government “chose to redistribute wealth by asset-enhancement, not by subsidies for consumption”. Focusing on economic growth neatly dovetails with the PAP’s own historical priority and justification for its continued monopolisation of power. It also fits in with the PAP’s own alliance with foreign capital. It is committed to helping maximise capitalist profitability. This is central to its strategy of making Singapore a profitable target for foreign direct investment.

How PAP leaders talk about inequality demonstrates this. In 2018, then-Deputy PM Tharman Shanmugaratnam said that like an escalator, everyone in society must continually progress, that the country must keep growing to sustain social mobility, that “an escalator that continues to carry everyone upwards also makes it much easier for a country to have social mobility”.

This has several important implications. Most importantly, PAP defines inequality as inequality of opportunity to be economically productive. The PAP’s targeting of inequality accordingly comes in the form of addressing structural barriers which prevent a Singaporean from maximising their economic productivity. This includes ensuring that students from disadvantaged backgrounds gain access to education, which itself is a major determinant of one’s economic prospects in Singapore.

Likewise, the PAP government is careful not to undermine Singapore’s international competitiveness, both by maximising subsidies in areas which allow a worker to remain productive, e.g. upskilling; by subsidising pensions and healthcare after the workers retire; and by selectively focusing on industries where low-income Singaporean workers are concentrated rather than instituting an across-the-board minimum wage, which can undermine economic competitiveness. 

The PAP’s solution to inequality is thus making it easier for workers to be economically productive and for children from disadvantaged families to compete in the educational rat race, not by finding other measures of evaluating human worth. 

This may be counterproductive in the long term. If a fundamental cause of inequality is capitalist exploitation, the PAP’s goal is to make it easier for Singaporeans to participate in their exploitation, not to reduce the opportunities for exploitation. Workers’ Party (WP) member and sociologist at the National University of Singapore, Daniel Goh, noted this in 2013 when he pointed out that the PAP government’s rhetoric “distract us from the underlying cause—unbridled capitalism—of the problems of individualism and inequality, and place the blame wholly on individual psychology”. Other ways of reducing inequality, which the PAP government does not consider, fundamentally work by shielding workers from exploitation via wage rises: strengthening the ability of workers to negotiate for fair wages (eg labour laws, trade unions), a minimum wage, universal social welfare, universal free education. Missing from the PAP’s perception of inequality is any notion of equality of inherent human dignity and worth.

One telling indicator of these values is that the Department of Statistics reports exclude households with no income (eg retiree households), households with no Singaporeans and Permanent Residents, and low wage foreign workers. It’s possible that it is a technical choice not to take into account people who are not economically productive, people who don’t vote, and people who are here to be exploited and cannot stay, respectively. It’s also possible this is simply to make the numbers look better. But all these groups influence, and are affected by, inequality and the relative cost of living in Singapore. More importantly, they are all people who are part of our community, and they are all human beings. Around the world, how governments measure inequality can vary singificantly. Ultimately, how it chooses to measure it reflects their priorities and values.

Tackling inequality is balanced against social stability

A second priority is social stability. The PAP will compromise on economic priorities as necessary to maintain social cohesion, but no further, and it is careful not to guarantee that social welfare will be maintained or that citizens have any rights to welfare. Schemes such as Workfare Income Supplement and the Progressive Wage Model carefully deliver just enough support to exploited workers to prevent outright anger and may be withdrawn at any time. As Garry Rodan notes, “The PAP’s policies since 2011 suggest that it’s not resistant to social welfare increases, so long as social rights are not enshrined, and technocratic elite discretionary powers are not compromised. In addition, the PAP’s growth model imposes structural limits—too much redistribution would impinge on the conditions required for profitable capital accumulation.”

Equally, a truly progressive agenda would, by definition, undermine the social and economic position of current elites as it would be redistributive and seek to return to the workers the profits created by the working class that has been skimmed off by capitalists. This would deeply disrupt the social structure of Singapore. The PAP’s narrative around inequality focuses on opening access to gaining advantages and privileges rather than creating a more just or equal society where such advantages and privileges do not need to exist.

Subscribing to meritocracy and emphasising personal responsibility over structural factors

While the PAP has tackled economic inequality structurally, in its rhetoric, the PAP continues to subscribe to meritocracy and continues to emphasise personal responsibility over structural factors in causing inequality.

In 2018, PM Lee Hsien Loong defined how the success of meritocracy by four indicators: first, when every child has a good start in life, regardless of which family they are born in; second, when every talent is recognised and developed to the fullest; third, when every opportunity is open to anyone with the right attitude and ability; and fourth, when a capable person faces minimal social impediments to be accepted, to contribute and to lead in society. 

Thus, while recent policies recognise structural factors, the PAP continues to emphasise individual responsibility as being a significantly greater determinant of inequality than structural factors. “Meritocracy” continues to be a central myth and tenet of its social policy. The issues surrounding meritocracy, in particular its use as an ideology to have people accept their place in the social hierarchy and limit access to the means of production, have been discussed elsewhere and need not be repeated here, but the most important issues are that it places the burden among individuals to succeed, blames individuals for their failures, justifies the retention of power by the existing elite, and allows the manipulation of the definition of “merit” (deliberately or otherwise) to suit those in control of the system.

Accordingly, for the vast majority of Singaporeans, the government’s attempts to address the fundamental inequality of economic outcomes are generally indirect, focusing more on correcting longer-term equality of opportunity. Whether one is able to then succeed within the system, the PAP argues, remains within your individual domain.

The problems with the Singapore system have been amply demonstrated by Teo You Yenn’s groundbreaking 2018 book This is What Inequality Looks Like. Based on visits to Singapore’s rental public housing neighbourhoods from 2013 to 2016, Teo provides an in-depth examination of socioeconomic inequality in Singapore. She challenged the PAP’s dominant narrative of meritocracy and economic survival, arguing that these narratives obscure and justify the plight of these families, to support the PAP’s policy priorities of self-reliance through employment and traditional family structures. She noted how one’s income heavily influences access to quality public goods and services like healthcare or housing and highlighted the systemic barriers and structural factors that perpetuate inequality, such as housing policies, education, and employment. She showed how poverty significantly constrains the options of the impoverished, how it reduces their agency, and snowballs disadvantage for their children even as parents from these households struggle to provide them with the same opportunities and life experiences as others. These dynamics also strip the poor of dignity by judging them against “normal” ways of living. When unable to meet these standards, outcomes are misattributed to their personal failings rather than structural conditions.

In short, because of the myth of meritocracy, one’s income is a reflection of one’s own hard work, merit, and worth as a human being. Therefore, if someone is poor, it is their fault for not working hard enough, rather than being born into poverty or structural conditions that prevent social mobility. The fact of their poverty is thus then used to justify discriminating against them and treating them poorly.

Overall, Teo argues that systems shape individual outcomes and that bettering the situation for the poor must go beyond financial transfers to changing prevailing narratives and how Singaporeans think about privilege, poverty, and inequality. 

Conclusion: How Inequality Corrodes National Identity

Let’s conclude by looking at one final way of measuring inequality.

Figure 13: World Values Survey: How Proud Are Singaporeans of Their Nationality? Source: World Values Survey, https://www.worldvaluessurvey.org/WVSOnline.jsp
Figure 13: World Values Survey: How Proud Are Singaporeans of Their Nationality? Source: World Values Survey, https://www.worldvaluessurvey.org/WVSOnline.jsp

A 2018 Channel NewsAsia survey found that class, not race or religion, was the most divisive factor in Singapore. They found that those who identified themselves as upper class were more likely to feel a sense of belonging to Singapore and feel proud to be Singaporean. This suggests that, as socioeconomic inequality becomes more severe, it corrodes national identity. This is corroborated by the World Values Survey (WVS) reports, where a consistently smaller proportion of respondents in Singapore who identified themselves as lower class felt “very proud” or “quite proud” of their nationality.

This larger theme of socioeconomic divisions increasingly affecting identity is further reinforced by OECD’s examination of students’ sense of belonging at school, which they found to be correlated with “feelings of security, identity and community … (that) support academic, psychological and social development” (p. 69). While most OECD countries saw their gap between socioeconomically advantaged and disadvantaged children to be stable or narrowing, Singapore was one of six countries where disadvantaged children’s sense of belonging in school had fallen relative to their better off peers from the 2012 to 2015 PISA cycles, the largest decrease among all surveyed countries. The report cites studies which show that students’ sense of belonging affects their self-identity, their overall satisfaction with life, and their motivation to learn and put effort into their own education. 

Returning to the definition of inequality at the start of this Explainer, we must remember that inequality can be economic, social, or political, but it is ultimately a fundamentally subjective and emotive issue. Gini and other macroeconomic indicators may tell us that we are getting more equal, but when people look around and they see retirees collecting cardboard, large numbers of very rich and very poor foreigners, luxury cars roaring down the streets, housing prices rising due to an influx of foreign money, and parents paying ever-higher sums for tuition just for their children to keep up, this triggers an emotive response which no economic statistic can account for.

To put it another way, inequality is just as much political and as it is economic. It goes deeply into our own sense of fairness, belonging, and our place in our society. If people feel that a situation is unfair, it undermines their willingness to participate in society, to trust that the government is working with their best interests at heart, and to work collectively. This opens the door to populism and other forms of toxic politics based on fear and suspicion. If people do not feel that society is fair, no amount of economic numbers, statistics, and stories will convince them otherwise. 

Further Reading

This Explainer is meant to be a basic primer on inequality in Singapore and draws heavily upon existing research. To fully understand the issue, we strongly recommend reading the following:

Join Us in Our Next Democracy Classroom!

In The Citizens’ Agenda 2022 by New Naratif, Singaporeans told us that inequality  was one of their greatest concerns. In our next Democracy Classroom, we analyse inequality and discuss what should be done about it.

Join us on Saturday, 6 May 2023, to discuss, dissect, and articulate YOUR thoughts and opinions about the inequality in Singapore in our upcoming Democracy Classroom, happening at 22 Dickson Rd, Level 2 from 2:00 pm to 4:00 pm.

Access is free, but slots are limited, so do sign up on our events page and we’ll see you there!

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