These days, work visa issue is one of the hottest issues in Singapore. It is getting harder for foreigners to obtain work visas. It is said that the Singapore nationals are not happy with their employment status and rising prices.
‘Foreigners came to our country and took our jobs.’
‘Super rich people are buying properties and raising the prices.’
It is important for politicians not to starve people, to secure their jobs, and to avoid extreme gap between the rich and the poor. However, Singapore has become a nation which has worse Gini Coefficient than that of Japan which is said to be a ‘gap society’
Gini Coefficient describes the degree of inequality among the society. Coefficient spans from 0 to 1. 0 is the status where everybody owns same things. 1 is the status one single person owns everything while others have none.
0.1～0.2：Almost no inequality
0.4～0.5：Considerable inequality which may lead to social instability
0.5～0.6：Large Inequality where public safety is in danger.
0.6～0.7：Status where riots may happen anytime
0.7 or above：Revolution and chaos
In a country where the wealth redistribution system is well designed with taxes and social welfare, the Gini Coefficients before and after the redistribution differ to each other.
If there is a certain trend in a country, bigger coefficient does not always mean that inequality is bad. For instance, in a country where the average income is high, the large gap between the rich and the poor does not make people angry so much. India is another interesting example. Although the gap between rich Indians and average Indians is quite huge, Gini coefficient is small due to the enormous number of average people.
According to Organization for Economic Co-operation and Development or OECD, most of the OECD member nations have Gini Coefficient between 0.4 and 0.5 before adjustment. After the adjustment considering social welfare and others, it drops down to 0.3.
In addition, countries which have large Gini Coefficient tend to have higher atrocious crime rates.
<Case of Japan>
Japan has the fourth highest Gini Coefficient among the OECD members.
It is due to the weakened wealth redistribution by taxes. The income tax rates for the middle income group are lower than other OECD members, and the social welfare system is weaker. Furthermore, the support to the child raising families is scarce. Especially for single parent families, the situation is not favourable.
<Case of China>
South-western University of Finance and Economics in Sichuan revealed in 2010 that China’s Gini Coefficient is 0.61 and it is a status you can expect riots anytime. The reasons are lower wealth redistribution and poor social welfare and education level.
<Case of Singapore>
The survey by CIA in 2005 shows that Singapore surpassed PRC and topped the Asian ranking in Gini Coefficient along with Hong Kong. Not like Japan, Singapore has an extreme gap between the super-rich and the ordinary people. I realized that that is why I seldom by things in Singapore. The goods line-up for ordinary people is quite slim here.
Gini Coefficient is calculated by various bodies and the results are different from each other. From one result only, we should not determine the situation. However, we can still have a rough picture of it.
Politics is a difficult thing. Redistribution of wealth is one important thing. Many countries have been trying to realize better environments for their people not only by introducing progressive taxation, but also social welfare system, employees’ benefits and tax break. Having looked at Gini Coefficients of various countries, it became clearer what kind of mix of them would work for individual nation. Population, national characteristic, geographical factor, etc. should be taken into consideration.
Singapore is a Mecca of Private Banking.
Even ordinary people like me can see super rich people in town in the daily life in this small island. There is a possible risk that we tend to be attracted to such a glamorous life of theirs and get frustrated by our real lives.
Where does Singapore go? What would be waiting for it after chasing after the American-like economic competition based social environment? I would like to keep a close watch on it as well as other Asian countries including Japan.