(Turfan, China) Are we heading in this direction?

Having last visited Singapore 2 years ago, I expected the city to be radically different. However, the area where my family stays hardly changed and even Orchard Road looks the same. City Hall appears different, but it is in the prices that I observed the biggest change. What struck me in particular was not so much the increase in prices, but how uneven the price changes have been. This uneven price changes has distributional impacts on what I see as two diverging segments of society.

Singapore is increasingly populated by two groups of people: the Hawker and the Banker. In Singapore, hawkers refer to the people who work in large food centers selling food or drinks. A few strike it rich but most are typically uneducated and belong to the poorer segment of society. I know this because my father is one of them, selling drinks in one of the large outdoor food centers that populate the island. But the Hawker I use in this analysis is a larger segment of society: the Singaporeans who lack the education to be globally mobile and benefit from global wage levels. This group is larger than you think. It includes many local graduates who accept stagnant local wage structures, and compete with educated immigrants from China, India or Nepal for white-collar jobs. On the side of the divide are the Bankers, not just people in the financial industry, but people who have a world-class education (often international) that gives them opportunities to pursue jobs as consultants, investment bankers, traders…etc. These jobs pay a globally competitive wage – a premium often reaching two or three times the average wage of a local graduate.

What struck me about prices when I returned was how the food sold by hawkers around the area I lived has barely budged. I do not know if this phenomenon is island-wide, but it was surprising to see a plate of Char Kway Teow still at the $2 or $3 I paid when I left. I met my former boss, a distinguished economist, and he felt the same way about the unequal prices. Are the Hawkers competing in a different world? One where being local meant facing competition that erodes pricing power and depresses wages? I talked to my mother, a nurse, and she said that wages have not risen in line with inflation over the past two years. While these prices have remained stagnant, I noticed that it was not so in the city area. What I though of as a fancy night out at Crystal Jade La Mian Xiao Long Bao now came with fancier prices. I went to look at cufflinks at Alain Figaret as I liked to do. They are now 20 percent pricier.

Another night, I was at a dinner hosted by one of Banker-type firms. It was for students studying at overseas university. All of the Bankers hosting us were from distinguished American and British universities. A Singaporean student at the table flew with her family to exotic locations every holiday, sometimes over weekends, dined frequently at expensive restaurants in Singapore whose fancy names I never heard of, and could hardly pronounce. One of the Banker-types was born in Singapore, grew up in the US/UK, and never ate in a food center in Singapore. They earned the global wage, one most Singaporean undergraduates dream off. They lived in another world beyond the sight of most ordinary Singaporeans; one I did not know existed until I left Singapore.

The Economist (Economics Focus Dec 22, 2007) observed that rising income inequality in modern societies does not result in a large difference in material comforts. However, I worry about what this gap means for a society in terms of power inequality and shared experiences. Can the Banker understand the life of a Hawker? Can he empathize with their difficulties or being so far removed from them, he wonders why anyone would need social security, handouts or subsidized healthcare? Will inequality mean that we have two groups living in two Singapores: one where fine dining, exotic holidays, and posh cars define a Singaporean experience, another where hawker food, trips to Johor Bahru, and SBS dominates? Walking around Bugis, I glimpsed people sleeping on the sidewalks and I wonder.

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