'Inequality has risen, but so have incomes'

'Inequality has risen, but so have incomes'
Mr Tharman speaking at the Academy of Medicine, where he was conferred an honorary fellowship.

SINGAPORE - The gap between the rich and poor here is not a result of the Government's recent growth strategies; it is a problem Singapore has had since the 1980s.

It then worsened in the 1990s even as families saw their standards of living rise, said Deputy Prime Minister Tharman Shanmugaratnam on Friday as he set out "basic facts" of Singapore's inequality story.

Speaking at a ceremony where he was conferred an honorary fellowship by the Academy of Medicine, Mr Tharman said that inequality here stems from the fact that Singapore is a city-state and is made worse by a phenomenal growth in education levels over a single generation.

Noting that the proportion of people with only primary education has dived from 50 per cent to just 2 per cent in 30 years, he said: "What it means is that the older generation of workers, who had low skills and wages for most of their lives and who were part of the developing economy that Singapore was, now find themselves in a developed economy, where incomes of younger people are a world apart from what they grew up with.

"As a result, we have both low and highly educated cohorts of workers in the workforce at the same time."

This is seen starkly in the workforce where a disproportionate number of middle- and high-paying jobs are taken up by younger Singaporeans, while Singaporeans who are 55 and above make up half of those in the bottom 10 per cent of the working population.

Thus, how education has transformed the labour force "has been the real drama of our first half-century", said Mr Tharman, who is also Finance Minister.

But he added that the Government is helping those who were getting left behind. For instance, through schemes like Workfare and the Special Employment Credit, it is giving older low-wage workers about a 40 per cent top-up to their salaries. It is also urging employers to raise salaries for certain jobs at the bottom of the wage ladder.

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