This was my best hawker meal on my recent trip home. Char kway teow for S$3.50 (S$1 = US$0.67) from Peter Fried Kway Teow Mee in Tanjong Pagar Plaza Market, and an afternoon coffee. The kway teow hawker uncle wore a lard-spattered t-shirt and flip flops and wielded a wok shovel—worn down until the blade was about an inch and a half long—to scrape at a wok the same size and shape of his considerable belly. You’re basically eating lard and wok skill.
I hadn’t planned this meal, as many people do when they seek out hawker food; I just happened to be in Tanjong Pagar with 20 minutes to kill, and went to the nearby food centre for a coffee. There I realised something smelled real good and followed my nose. This is what it means to have a hawker culture.
If you want to see this culture in the form I know and love, you’d better get to Singapore as soon as we can travel again, because no one thinks it’s going to last much longer. You can read about the death of the hawker all over the internet, but today, I’ll write about one dimension of what it might take to keep hawker culture alive: money.
My premise is this: for hawker culture in Singapore to last across generations, we must ensure that most hawkers make enough to live on. It is not enough to look at a few enjoying an unusual degree of financial success, particularly when this is usually achieved by cutting costs and thus diluting all the intangibles that make hawker food great. We need to ensure that the people running the chicken rice stall you’ve never heard of before—the one you stumble upon when you’re looking for lunch in a strange neighborhood—can make a decent living too.
How much should I have paid the char kway teow uncle, if I want this experience to be available to my friends’ children in the future?
This is a quick breakdown of what it costs to run a hawker stall, what it costs to live in Singapore, and how the two numbers compare. How much, in short, should I have paid the kway teow uncle, if I want this experience to be available to my friends’ children in the future?
There are three parts to this analysis:
- Estimate what it might take to live in Singapore, while feeling like you and your family are full and equal members of Singaporean society.
- Outline what we know about the hawker business model, to estimate what most hawkers currently make.
- Bring the two together for an estimate of how much a plate of char kway teow should cost if we want to keep hawkers in the profession.
How Much Money Do People Need?
Most discussions about how much money people need gravitate towards a minimum wage, and how much it should be. There are two problems with this approach.
First, Singapore’s government has always flatly rejected any debate about instituting any general floor for wages, so we are left without an official number for what this might look like.
Second, the minimum wage, in its original sense of a legally mandated “lowest wage that employers may offer” is increasingly regarded as inadequate or outdated. Revisions generally do not keep pace with increases in the cost of living, and hence often fail to provide workers with sufficient income to have even a minimal quality of life.
For this reason, movements for a “living wage” have sprung up worldwide. A “living wage” is “the minimum income necessary for a worker to meet their basic needs”. A needs-based approach and the commitment to meeting a minimum standard are key differences between a living and a minimum wage. However, the term “basic needs” introduces flexibility and uncertainty, because there is no standard list of basic needs. What constitutes a “basic need” is influenced by location, household type, cultural mores and other factors. There is also the question of whether non-physical needs should be considered “basic:” is feeling like a part of society a basic need, or do we just care about whether people can feed, clothe and house themselves?
To illustrate this dichotomy, it is instructive to consider the difference between the living wage campaigns in the US and the UK. The MIT Living Wage Project, on which many American living wage campaigns are based, calculates a living wage purely based on market prices drawn from databases compiled by governments and NGOs. According to their documentation,
“The living wage model does not allow for what many consider the basic necessities enjoyed by many Americans. It does not budget funds for pre-prepared meals or those eaten in restaurants. It does not include money for entertainment nor does it does not allocate leisure time for unpaid vacations or holidays.”
The project’s documentation actually states that what they calculate might better be thought of as a “minimum subsistence wage”. It’s enough to live on, but not enough to feel like a full and equal member of the society around you, let alone a valued one. Living on such a “living wage”, in other words, tends to make people feel like members of some lower caste, whose greatest dream is that their children need not follow in their footsteps. This is the kind of existence that leads to people leaving the trade as soon as they can. (I have written about this issue from the perspective of American restaurant food as well.)
On the other hand, the Living Wage Foundation in the UK bases its assessment of “basic needs” on the UK Minimum Income Standard (MIS), which does take into account non-physical needs, or needs that are established by social mores rather than the pure facts of survival.
“The Minimum Income Standard (MIS) refers to a research method establishing what incomes households require in order to reach a ‘minimum’ standard of living, appropriate for the place and time in which they live. It is reached by talking in depth to groups of members of the public, asking them to agree what goods and services households require in order to have such a living standard. The results are used to construct minimum budgets for different household types. MIS is about more than just what is needed to survive, and refers to what is required to be part of society, according to definitions produced in each country by members of the public.” – from the What’s Enough SG website
These intangibles are key to our discussion today, since we are asking not just what hawkers need to earn to meet their basic physical needs, but what they need to earn to feel like hawking is a reasonable choice of profession: one that, like any other, has its blessings and curses, but nonetheless enables its practitioners to be full participants in modern-day Singaporean society, rather than servants to other Singaporeans. The MIS methodology, through its use of focus group discussions and consensus, helps to take into account the social norms and values that are inherent to such a concept.
However, we don’t yet know what the MIS for Singapore might be for most types of household. Researchers have published an MIS study that establishes a figure for elderly persons living alone or in couples, and are now working on a study for the same for young and working-age adults. Studies need to be undertaken across more household types for us to know how this might apply to hawkers.
A Minimum Income Standard is about more than just what is needed to survive, and refers to what is required to be part of society … to be full participants in modern-day Singaporean society, rather than servants to other Singaporeans.
Pending the conclusions of the What’s Enough SG’s MIS study for other household types, what we can do is attempt to estimate a level of income for hawkers that is not merely one that enables them to meet their immediate physical needs, but “to be part of society, according to definitions produced in each country by members of the public”.
I would like to stress that I am NOT attempting to estimate an MIS for non-elderly households in Singapore—the MIS requires in-depth research using the methodology of focus group discussion. All I am taking from the MIS is the assertion that non-physical needs, in particular the need to feel like a part of society, are as important as physical needs.
How Much Do You Need to Earn to Feel Like a Full Member of Singaporean Society?
I’m going to assume that our hawkers are Singaporean (this is actually a legal requirement for renting a hawker stall from the government), that they own a HDB flat (around 79% of Singaporeans live in an HDB flat they own), and that a typical hawker stall is run by a couple with one child, with both adults working at the stall. (I realise these norms aren’t universal, but I’m trying to estimate what it costs to live the minimum cis-hetero-centric version of the “Singapore dream” that the government promotes.)
The Singaporean government published a Household Expenditure Survey (HES) for 2017/2018. It’s extremely detailed, statistically representative, and best of all, comes with a minutely detailed Excel file. One major caveat is that it generally doesn’t include the cost of housing.
Using this survey, I attempted to estimate an adequate income for a working Singaporean couple with one child. I’m assuming that such a household, if it can afford a median level of household expenditure (as defined by the HES), feels like a part of society, though we’re probably all familiar with the sense that we’re not quite keeping up with the neighbours. To this level of household expenditure, we need to add the cost of housing (remember that this is excluded from the HES) and a component for savings, and then account for the fact that all of this has to come out of post-tax income.
This approach has some similarities to that used by the UK Living Wage Foundation: they begin with a particular basket of goods and services that meets a household’s physical and non-physical needs, then add in housing and savings (in their case, pension contributions) and account for the fact that this is all post-tax income. In my analysis, I use median expenditure as a stand-in for the basket of goods and services.
In Singapore, the average monthly expenditure, excluding cost of housing, for a household of three is $4,605. Median monthly expenditure, again excluding cost of housing, falls between $3,000 (37th percentile) and $3,999 (55th percentile). Therefore, $3,500 seems like a reasonable, round-number approximation, though the real median is probably a little higher.
Assuming our hawkers live in the cheapest available HDB unit (approximately $300,000) and put down the lowest possible downpayment, a standard 25-year mortgage results in a payment of about $1,000/month. Really calculating the cost of homeownership can be complicated because, among other things, there are several government subsidies available, but $1,000/month is probably close enough (for more detail, try this guide).
So far, our hawkers need to make $4,500/month, but this doesn’t account for savings or taxes.
How much should our hawkers save? Singapore has a longstanding compulsory savings scheme (the Central Provident Fund, or CPF) that effectively mandates that wage-earning Singaporeans save about 31% of their effective income. Between a quarter and a third of this goes toward a health savings scheme (MediSave). Hawkers, as self-employed individuals, do not have to contribute to the compulsory savings scheme except for the portion allocated to health savings.
In recent years, it has become increasingly clear that CPF alone does not provide Singaporeans with a comfortable retirement, meaning that our hawkers should really be saving more than this. Without getting deep into retirement calculations, let’s assume that our hawkers should save at the rate of 31%, independent of their MediSave contribution. This gives us “higher than CPF” savings rate we specified. Since the mandatory contribution to MediSave is approximately 9%, we now know that $4,500/month should represent 60% of their post-tax income, meaning their total post-tax income should be $7,500/month.
Finally, taxes. Singapore’s income tax calculators tell us that because they have a child, and Singapore has extremely generous child tax credits, our hawkers can avoid paying any income tax at all, meaning that our final income target for this hawker family is $7,500/month.
I should stress that this is not intended to be an MIS, since the MIS emphasises qualitative research and consensus, but it does seem to be a reasonable working estimate for the income a family of three might need in order to meet the intangible goals the MIS attempts to quantify.
So, How Do You Make $7,500 a Month as a Hawker?
In 2014, the National Environment Agency, which regulates hawkers, conducted a “Cost Component Survey” of the hawker trade, involving approximately 1,000 face-to-face interviews. Some results were published in a paper by government economists in 2015, including the chart below. (Please note the percentages add up to 100.8%. There is no explanation in the source for this. We have rounded the percentages down in our subsequent calculations so that they add up to 100%.)
The NEA repeated the survey in 2018, but, to the best of my knowledge, did not publish the results, other than to say that “the findings remained the same”.
Hawkers do not pay themselves a salary; they live on the take-home from the stalls. This survey thus tells us nothing at all about their earnings. The manpower component is the going rate for a hawker’s hired assistant. It is common to hire such a helper, but it is also common for stalls to be family operations with no hired help. I have not found a reliable breakdown of how many stalls operate according to each model.
If we assume that a hawker’s cost breakdown today is reasonably close to the one above, that provides some benchmarks from which we can estimate the cost of running a hawker stall. Recently published interviews suggest that the going salary for a hawker’s assistant today falls between $1,800-2,400, while the average successful tender for a cooked food stall from the NEA was $1,514/month in 2018. Using these benchmarks, I performed two separate calculations, making one set of figures from the manpower number and one from the rent number (rounding decimals down); the results came out very close. Going forward, I will use the average of the two methods.
My $3.50 plate of char kway teow is reasonably representative of hawker food prices today—estimates generally converge on a figure of $3-4 per plate. Published interviews indicate that profit margins on the low end are 20-30 cents, though at least one older source suggests the average margin is higher. If, of the $3.50, 50 cents is profit and $3 is cost, these numbers give us the transaction count and take-home margins set out below.
These numbers seem plausible because published interviews suggest hawkers generally take home $1,500-$3,000/month. One commonly cited benchmark for being good enough to stay in business as a hawker (though I don’t know where this comes from) is selling 200 plates a day.
…to enable hawkers to earn the wages that I estimated as necessary for them to truly participate in society, we really should be paying about 80 cents—or about 23%—more per plate.
Assuming the manpower cost goes straight to the household’s bank account, because the intrepid couple run the stall together instead of hiring an assistant, their monthly income is $4,203. From this we can conclude that to enable hawkers to earn the wages that I estimated as necessary for them to truly participate in society, we really should be paying about 80 cents—or about 23%—more per plate.
A Few Caveats
At this point, our hawkers would make a median income, which should be enough to meet a basic living standard and allow them to save for the future. It is worth pointing out that the work is still incredibly hard, with most hawkers facing 12 to 14-hour workdays. We’ve actually already cut our theoretical hawkers a break, because many hawkers work six days a week, and our calculations assume a five-day workweek. It is worth asking if Singaporean norms are such that a median income is enough to attract people to a profession that poses such challenges.
It may be tempting to say: “Great, we’ll slap an 80-cent surcharge on hawker food and declare victory.” The most obvious problem with this idea is that it would have a devastating effect on the living costs of many Singaporeans. Quantifying that effect is beyond the scope of this article, as is deciding on an actual solution.
One Last Set of Numbers, and I’m Done
I’ll close instead by offering a different way of measuring “enough”, and citing another set of government statistics, because you can never have enough of those.
Singapore’s Ministry of Manpower publishes a survey of occupational wages each year, which gives us a very concrete way of comparing how much Singaporean society today values hawkers—the living embodiment of one of the most precious elements of our culture—vis-à-vis other workers.
Comparing a hawker earning $2,100 today to the median gross wages for other professions, they are making about as much as a:
- Fumigator / Pest and Weed Controller ($1,940)
- Sales demonstrator ($2,100)
- Mail carrier ($2,150)
- Office cashier ($2,297)
If one half of our hawker couple makes $3,750, as our calculations suggest they might need to, this person would make as much as a:
- Auditor – Accounting ($3,400)
- Excavating/Trench digging machine operator ($3,602)
- Operations officer (except transport operations) ($3,821)
- After sales adviser/Client account service executive ($3,878)
And here are some professions where the median wage for an individual is approximately equal to the income of both members of our hawker couple put together:
- Advertising/Public Relations Manager ($7,103)
- Sales and marketing manager ($7,200)
- Commodities derivatives broker ($7,588)
- Business Development Manager ($7,760)
It is worth reflecting on how these comparative salaries square with the value our society claims to put on hawker culture. We do not make public pronouncements about how “After sales advisers” (but presumably not before sales advisers) contribute to the essential fabric of life in Singapore. We have not nominated advertising or public relations to UNESCO’s Representative List of the Intangible Cultural Heritage of Humanity. We do not talk about how much poorer life in Singapore would be if we were to lose all our Business Development Managers in the next 20-30 years. Yet we embrace and perpetuate a social and economic system that is essentially spawning more jobs like this, and that keeps Singaporean wages competitive partly by keeping the price of hawker food low, with the result that hawkers are driven out of the profession.
We embrace and perpetuate a social and economic system that is essentially spawning more jobs like this, and keeps Singaporean wages competitive partly by keeping the price of hawker food low, with the result that hawkers are driven out of the profession.
With thanks to Walter Theseira. I owe you a plate of char kway teow.
Further Reading About the Minimum Income Standard
EDIT (26 Jan 2021): The MIS focus groups have ended and they are no longer seeking volunteers. We have removed the link to the page to volunteer.