Singapore has 'avoided income stagnation': DPM Tharman

Those from low-wage families outdid peers abroad in climbing income ladder: DPM Tharman
By Janice Tai, The Straits Times, 27 May 2016

Singapore is doing relatively well when it comes to the ability of the next generation to do better than their elders, Deputy Prime Minister Tharman Shanmugaratnam said yesterday.

It has avoided income stagnation for the low- and middle-income groups so far, and low-income families here have outperformed their peers elsewhere, he added.

In Singapore, for instance, 14 per cent of those born in the bottom quintile, in terms of income, made it to the top quintile by their late 20s, according to a 2015 study by the Ministry of Finance. This is double that seen in the United States and slightly higher than the 12 per cent observed in Denmark.

Mr Tharman, also Coordinating Minister for Economic and Social Policies, was delivering the opening speech at an international conference on inter-generational transfer, human capital and inequality held in Singapore for the first time.

At the three-day conference at NUS University Town, attended by 250 academics from over 30 countries, he dwelt on various strategies in education and housing that countries including Singapore - which has adopted many of them - can look at to preserve social movement within society.

Firstly, urban planning matters. Many studies show a profound link between where one lives and how well one moves up in life.

Singapore's fundamental strategy, said Mr Tharman, is integrating people of different socio-economic groups and ethnic backgrounds in the same neighbourhoods.

The problems with ethnic enclaves and segregation are avoided by design through housing quotas and estate planning. Everyone has access to the same leisure and transport facilities as well as schools and, therefore, there is a higher likelihood of equal opportunities.

Aspects like unemployment, for example, are sometimes associated with certain neighbourhoods in other countries.

"The result of all this is that, while we have disadvantaged families and individuals in Singapore, we do not have a single disadvantaged neighbourhood," said Mr Tharman.

The gulf in wealth accumulation is avoided as everyone enjoys roughly the same rate of property price appreciation, from those in the smallest flats to private property owners. "If you look at it, since 1980, we have had the same rate of property price appreciation across the board - about 5 per cent per annum - in fact, slightly more for the smallest flats," said Mr Tharman.

Education also plays a crucial role in levelling the playing field.

That is why Singapore deploys its best teachers across the whole educational system, so students have access to quality teachers despite being in different schools, he said.

But being egalitarian does not have to mean having a uniform education. Doing so may result in unegalitarian educational outcomes.

He cited how the French belief in equality resulted in every school having the same curriculum and teaching pace. Yet, by age 15, one-third of the students have repeated at least one year of school and, by the time they leave school, one out of five leaves with no qualification.

Thus, there is a need to differentiate learning according to a child's abilities and learning styles, he said.

In general, the state needs to intervene in a way that reinforces individual and civic responsibility, he said. This is not a paradox, he stressed, and this approach informs all of Singapore's social policies.

For example, the state does step in fairly boldly to help the poor through schemes like Workfare for low-wage workers. Government data shows that a low-income couple today in their 20s will receive benefits, through Workfare and housing grants, that add an extra one-third to their lifetime incomes by the time they retire. However, they get benefits such as Workfare only if they continue to work.

Challenge of maintaining social mobility defies easy solutions: Tharman
Singapore’s way is through ‘inclusion, developing human potential’
By Neo Chai Chin, TODAY, 27 May 2016

In the face of social forces that are complicating solutions for the challenge of social mobility, Singapore’s strategy is developing human potential and building inclusive neighbourhoods, said Deputy Prime Minister Tharman Shanmugaratnam yesterday.

Speaking at an international sociological conference held at the National University of Singapore, he expounded on Singapore’s education system, early intervention attempts and public housing policies, and called for humility in tackling the challenge of social mobility, which has defied easy solutions.

Mr Tharman said besides income inequality, there are more complex social forces at play that are widening the distance between different social groups in many countries. He cited parenting styles, school performance, health outcomes and neighbourhoods segregated by race and income. Many of these shifts have taken place over long periods of time but are now in sharper focus, he noted.

In the United States for example, a much larger proportion of men with university degrees are marrying women with degrees, compared to decades ago. College-educated parents now spend significantly more time with their children — reading, playing, taking them to parks and museums — than parents who did not go to college. And a widening gap in family structures can be seen in the sharp increase in births outside of marriage by women with high-school education or less in the US, when this rate involving college-educated women has remained constant.

These and other shifts have created a sense of unease and loss of social trust, said Mr Tharman to an audience of about 250 scholars from over 30 countries at the International Sociological Association Research Committee 28 (Social Stratification and Mobility) Conference. Social mobility in Singapore is significantly higher than in many advanced societies but it will face the “same stickiness at the top” and at the bottom, as those who have done well find ways to retain advantages and as disadvantages get passed on to another generation, he said. Singapore must do its utmost to preserve an inclusive society, he added.

Mr Tharman called for innovative early intervention and learning from small-scale pilot projects. When it comes to schools, Singapore does central recruitment and training, spreads good teachers across the system and ensures teachers’ subject-matter expertise.

Singapore is also enabling differentiated learning within the public school system while allowing students to have a common school experience, he said. It is broadening the ways it measures students at the end of primary school, reducing emphasis on exams in the early primary years, and broadening the ways secondary schools and tertiary institutions select their students.

Calling it an extremely important reform, Mr Tharman said Singapore wants to keep the basic strands of meritocracy that are fair to those who have started well in life as well as to those who started off with less but have put in the effort and done well. But the concept of meritocracy has to be broadened to recognise a wider range of skills and talents that make a difference in life, he said.

Mr Tharman also spoke about how Singapore’s housing policies — such as public housing ethnic quotas and estate rejuvenation — have enabled integrated neighbourhoods where “everyone has enjoyed roughly the same rate of home price appreciation, from those in smallest flats to the upper-middle income group, and in fact including private property”. This has prevented a gulf in wealth accumulation within the population, he said.

Even as an “activist state” is needed to intervene, “we need some humility”, Mr Tharman said. “We must recognise that this is a challenge that has defied easy solution. Lots of interventions, in a whole range of societies over the last 50 years, but with very limited success. And some unintended results – unintended changes in social values and habits that now make the problems more intractable. So we need some humility in this whole endeavour.”