Wealth, wage gap and a fair price for labour

PHOTO: Wealth, wage gap and a fair price for labour

SINGAPORE - It is a mistake to begrudge someone's wealth relative to one's own ("Minding the wealth gap"; Dec 4). Wealth is merely the accumulated savings of earned income.

We should use wealth in the right way, like Singapore's foreign reserves, which protect our strong currency and enhance social welfare for everyone.

Private wealth, too, can do much social good if it is invested back into physical and human capital for the economy, instead of being squirreled away.

About 35 per cent of Singapore's economy is funded by foreign investments.

Singapore can gain from this by way of taxes and better wages for citizens.

Domestically, we must accept a scale of income distribution that starts with a living wage at the bottom, so that the benefits of growth are spread more widely.

This is good for business as domestic consumption is strengthened when households have more income to spend.

Lower-income households will be able to save more too.

By deconstructing the underclass in our economy, all stakeholders will need to adjust and move towards a fair price for labour, which completes the virtuous cycle between personal interest and sustainable economic growth for the country.

A functioning society needs this social compact.

We must realise that useful contributions can be made by people with different skills, knowledge and applications - that is the premise of meritocracy.

With common comity, we can be assured that all jobs that need to be done will attract people motivated to do them well.