Friday, March 23, 2007

Singapore Ministerial Salaries

Here we go again, with the Singapore government talking about the need to 'close the gap' in order to make sure that the public-private pay gap are not widened, in order to "ensure competitive salaries for a competent and honest government." PM Lee also spoke about the need to 'retain talent.' We have all heard the argument before. Common folks (including taxi drivers) have often complained about the high salaries the ministers are drawing. Some people have even said that the way to become a millionaire is to become a Minister of the Singapore government!

This time, as I read and reflect upon it, I think PM Lee does have a point, and I applaud his courage to bring it out. Let me explain by giving three possible reasons.

#1 - COURAGE: It is not easy for a high profile minister to talk about salaries. Who dares to talk about one's own pay in a conservative Asian culture, where salaries spoken in public can be taboo! Look what happened to TT Durai of the NKF case. Do ministers need that level of pay increase to sustain their daily lives? It is actually more symbolic than anything else, that the pay amount makes it more palatable for talented people to consider entering into the political arena. A good economy does depend on a good government, and more often than not, nobody will even want to campaign openly for it, thinking that the government can take care of itself. In a sense, the government should take care of its interest, for afterall, they are working for the interest of the country in the first place, isn't it?

#2 - OPPORTUNITY COST: The current ministers DO have better pay in the private sector. I think many corporations will be prepared to pay PM Lee to be their CEO, at even double his current salary. There are also other ministers who have to take a pay cut to serve in the ministry. It will be less than optimal if a minister have to take on a second job to restore any difference. How can a minister then allocate fully his time and resources to the service of the nation?

#3 - LACK OF PUBLIC/PRIVATE APPRECIATION: In many cultures, people tend to talk behind the backs of influential people. They are more liberal with negative comments rather than positive feedback. At times, I even think, that it takes one to do SEVEN GOOD deeds in order to trigger some level of public recognition, while on the other hand, it takes a simple ONE BAD EVENT to unleash a storm of protests and complaints. Call it a form of compensation.

I think back on those social organizations where social-workers receive one of the lowest pay in the whole economy, yet people continue to say that the work they do are 'priceless.' Isn't it common to hear positive comments about social workers helping an unemployed widow of many children find a job? Yet how many people will raise their hands to become social workers? Not many, as one of the reasons is that it does not pay adequately). Jobs that result in 'obscene profits' are on the other hand not as widely acknowledged to be beneficial to society. Think about horse-racing, gambling and some forms of investment trading, which require shrewd/cunning politicking and deceitful strategizing.

The way the economy works is basically like the following levels of profitability/contribution.

Level 1 - HIGH Pay and HIGH Sociological/Ethical Societal Contribution
Level 2 - LOW Pay and HIGH Sociological/Ethical Societal Contribution
Level 3 - HIGH Pay and LOW Sociological/Ethical Societal Contribution
Level 4 - LOW Pay and LOW Sociological/Ethical Societal Contribution

Ministerial pay traverse either at levels 1 and 3, as far as the commonfolk is concerned. PM Lee seems to think that the ministers are at Level 2. Assuming that the Singapore ministers are on the high end of societal contribution, even assuming that their pay is relatively low, they are undisputedly the highest paid group of social workers or civil servants. The rest of the people like actual door to door social workers, religious organizations and civic self-help groups are at the mid to bottom of the rung. I would suggest that no matter how we put it, a majority of social organizations and non-profits will be at Level 2. Even if we were to assume that theGovernment ministers will be at level 2, it is most certainly the HIGH END of level 2. Nevertheless, I will suggest the following.

Firstly, let them 'close the gap' in order to attract and retain good people in leadership. Secondly, let them 'close the gap' as long as they are able to fight for the poor and the marginalized in society (not just the pay differential among top servants in public/private sectors). Finally, let them 'close the gap' and to promote a behaviour that does not close the people's gab.

ks

Link - "Top govt salaries far behind private sector's"

12 comments:

Anonymous said...

Just let me ask a question: Which company wants to hire a government official (nearing 60) with absolutely no experience in the private sector?

Yes, it takes courage to announce raising of salaries. Yes, we need to pay people money if we want talents. But have these talents shown their abilities? Or has the status quo in Singapore just been maintained? Or has it gotten worse?

Anonymous said...

why I think your reasons are wrong:

1. Civil servants means servants to the people not "master". The servants should not be motivated by money to serve the country and the people. In a way a high pay will attract greedy materialistic leaders. This reasons applies to all charitable and religious organizations as well. I think not "courage" but "thick skinness" for one to raise one's pay. Does it mean that the leaders all over the world from past till present are useless and not talented? ( the pay of singapore ministers are a gap higher then the highest paid ministers in the world)

2. As the previous comments said, most of these ministers do have experience in total private companies.

3. Isn't $1.2m not high enough? Do they have difficulty meeting end meets? or cope with high standard of living? I for sure do not want leaders who work for greed!

YAPdates said...

Hi,
Thanks to all who make comments on my blog. (Reminder: As a personal blog policy, anonymous postings or unknown ids will not be considered for any response.)

ks

Zixu said...

from my previous post, I was too lazy to sign in, this is my actual name :)

why I think your reasons are wrong:

1. Civil servants means servants to the people not "master". The servants should not be motivated by money to serve the country and the people. In a way a high pay will attract greedy materialistic leaders. This reasons applies to all charitable and religious organizations as well. I think not "courage" but "thick skinness" for one to raise one's pay. Does it mean that the leaders all over the world from past till present are useless and not talented? ( the pay of singapore ministers are a gap higher then the highest paid ministers in the world)

2. As the previous comments said, most of these ministers do have experience in total private companies.

3. Isn't $1.2m not high enough? Do they have difficulty meeting end meets? or cope with high standard of living? I for sure do not want leaders who work for greed!

There is a benchmarking flaw according to this ST forum author.
http://www.straitstimes.com/portal/site/STI/menuitem.c2aef3d65baca16abb31f610a06310a0/?vgnextoid=7532758920e39010VgnVCM1000000a35010aRCRD&vgnextfmt=vgnartid:f06c2545fa991110VgnVCM100000430a0a0aRCRD

Zixu said...

The word minister come from french origin ministre which means servant, can you tell me that any servant who get very high pay?

YAPdates said...

1) Ideally speaking, you are right. A servant should serve the master. In our interconnected world, it is more true to see servant in terms of serving moments rather than a perpetual state of servanthood. This means how one serves depends on the situation. Sometimes a top official serves by sacrificing his weekends to attend meetings and charity functions. Other times, they do have people reporting to them as well, and most of the time, they 'serve the people' through delegation.

Will high pay attract greedy materialistic people? Certainly. That does not mean that it will NOT attract good people, who are not greedy or materialistic. No system is perfect. As for 'thick-skinned' vs 'courage', I think it is plain semantics. Whether one sees it as courage or thick-skinned, it has about the same effect.

3) Again, I have said that the increase is 'symbolic' rather than anything else. I truly doubt if the motivation is greed. It is more likely a dangling of a bigger carrot, that on the one hand admits that: "Yes the pay is lower than what you are getting now, but it is not THAT low." More important, I doubt financial rewards alone can attract. It is more likely a combination of the increase in stature for people entering politics, as well as a 'minimum sum' for prospective politicians to consider. Having said that, it will be a bonus for the country for people to come forward and truly serve sacrificially. Like trying to win the top prize by opening can tabs of a beverage competition, chances of getting a good candidate who meets all the noble requirements are slim. Yet there is a country that needs to be governed. The next best thing the government can do, is to be pragmatic about it. Use money.

Thanks for your comments.

ks

Zixu said...

For me, a servant is serving and is a servant as long as one holds a 'servant' position. A 'leader servant' is a servant who serves by leading. One who serves with the heart albeit through delegation. E.g. Jesus and his disciples, who are truly humble, sacrificial. Their income are definitely not high, I think its even a 'good income' as opposed to what some 'success theologians/chritians' perceive.

First and foremost, the premise of discussion and analysis is to dintinguish the compensation/renumeration (scheme) of those in service(non-profit) and those in the profit organisation. The former is risk-free and the latter involves a risk-reward factor. There should not be risk-free(capital risks) and high returns.

Very seldom will we see leaders of non-profit organisation get very high pay, if there are(like the case of TT Durai and others) the general public will strongly oppose. Why? Is it because the are jealous? No, its because its public money and people expect them to be servant like and receive more humble pay. Most people have this God-given consciousness. This does not mean that we should pay them poorly.

The pay increase is not just symbolic, its materialistically substantial(millions of dollars). One can't tell/judge whether a minister is doing for the money by just observing.

Yes, we still attract good people who are not greedy, why then is there the need for high pay and high increment? Its ironic!

It seems to me that the pay is not simply just a factor but a high priority factor. Can you name a great political leader who has a very high pay (like our leaders).

And what should be the correct benchmark? Is there a limit? I agree very well with this ST forum writer:

“THERE is unhappiness with ministers and senior civil servants getting top pay because of the private-sector benchmarks used, which include the remuneration of top lawyers and accountants.
Top lawyers and accountants are well-paid because they are often major equity partners. They have risked their own capital and taken on personal liabilities to build up their businesses.
Founder CEOs in other companies are likewise rewarded for their upfront capital risks. Ministers and civil servants bear no such risks.
Like stocks over bonds, the rewards of risk-taking are compounded over time - assuming you are not one of the many anonymous unsuccessful risk-takers. “
There are very serious flaw in the benchmarking. The current pay of our PM is about 3 to 5 times more then the President of USA. A more realistic benchmark should be set with the political counterparts of other countries. Using this reasoning of extremely high pay to attract talent, its either that the political leaders in the First World countries are a lot less talented then ours or they were always lucky to go through the “slim chance” of getting credible candidates. It should not be the former as there are at least quite a handful of good governments with integrity in the world like Finland, Switzerland and New Zealand etc. If it is the latter, then our credible and capable leaders should by now already acquired the know-how of attracting good candidates with the pay similar to these countries by learning from them.
I would say “close the gap “ to the correct benchmark and come down to earth and have a true humble servant spirit.

YAPdates said...

Zixu,

The question "How much is enough?" is a slippery one. Ask 10 persons, and there will be ten different kinds of responses.

So far, I do not see any disagreements with regards to the logic for salary increments for ministers. Ministers also do NOT need that increment for their daily needs. Your main contention is basically the benchmarking process. That too, I do not disagree.

In a utopian world, where everything is ideal and perfect, people will be falling over themselves to volunteer to serve the country, regardless of the amount of pay they get. In a utopia, these people will be perfectly compensated.

The world we live in is nowhere close to such a world. Instead, it is feeding from a culture that is built on capitalism. 'Greed' in capitalist terms is now called 'ambition'. 'Service' is understood in a reciprocal sense in the form of you-scratch-my-back and i-scratch-yours. 'Self-centeredness' in society is fast replacing 'self-sacrifice'. 'Rulers' are enthusiastically called 'servants'. We are increasingly trapped in this vicious cycle and there seem to be no way to break it.

My support for the raising of salaries is contingent on the following three things:
#1 - Broaden the scope of attraction of good people
#2 - Broaden and embolden the government to support the poor and demarginalized in society
#3 - Promote greater freedom and openness in a young country trying to grow up in a big world.

Finally, we can think of the capitalist society in terms of 3 stages: 1) a big tall adult, 2) a thin youth, and 3) a skinny little boy, taking a shower with a single tap. Lining up according to height, the first man gets the bulk of the water. Some of the water splashes moderately to the youth, and finally the droplets of water fall on the little boy. In order for the little boy to get more drops of water, the system requires we will need to turn on a bigger tap onto the first person. In other words, in such a world, in order to benefit the rest, it always starts at the top.

Until we change the culture, it is either we wait for the future utopia which we do not know when will arrive, or we do something in the present to create the next best thing.

ks

Zixu said...

Ks,

So far, the response from the public are mostly negatives judges from the comments on the internet (e.g. sgforums, youngpapblog.blogspot.com) and responses to the newspaper. Most of the people I know are against it.

The whole issue is about benchmarking and not that ministers should get meager. It may mean that they should get a pay cut if another benchmarking is used. (e.g. benchmarking the pay to the those Ministers of the first world countries).

I don’t think those who disagree are asking for an utopian world. Do you mean that ministers from the first world countries are living in utopia? Since even the highest paid ministers are getting about 5 to 10 times lesser then the newly increased Singapore ministers pay. Are you living in utopia (Canada) then?

In this case of the vicious cycle is that pragmatic mentality breeds further pragmatism and materialism. The vicious cycle of course will not be broken given the glorification and propaganda of such mentality. The first step into moral downfall is the compromise of values. Most sin takes place in the mind first. When the battle is lost in the mind, Man will find it easier to give excuses for his deeds. Virtues and truth must absolutely be upheld. (again, nobody is asking for ‘super’ idealism i.e. meager pay). I hope you as a Christian will not choose to dwell on this path of thought, be it spiritual or secular.

The younger generation of Singaporeans, are after all the ‘products’ of pragmatic and materialistic influence that our government more or less exerted.

I don’t think the reasons for your support are valid:

#1 – Good people do not need and will not want extravagant salaries. E.g. Our pioneer leaders. Even if they get 2 times the salary of the U.S. president, they should be more than happy.

#2 – Please read articles like (theonlinecitizen.com/2007/04/09/ministers-salaries-losing-touch/#more-276), www.channelnewsasia.com/stories/singaporelocalnews/view/263041/1/.html)

“One MP asked a pointed question on whether increasing the Public Assistance or PA allowance by a mere $30 a month to $290 is sufficient.

"My single constituents told me that they needed to skip one meal a day to live on the $260 per month and now, MCYS is going to give them one dollar more a day but one dollar a day will not be able to buy them one meal a day in any hawker centre," said Dr Lily Neo, MP, Jalan Besar GRC.”

Just about 2 weeks before the news on the pay rise the Minister refuse to raise the PA to $400 (according to survey it’s the bare minimum for the needy not to skip meals). The needy means those who are not able to work and no one to depend on.

Do you mean it’s a hint that the leaders need many more millions to provide better help?

#3 – I do not find any relationship between the two. Many more countries which are more free and open then ours have much lower ministerial pay. This was the case when they were young countries. Their founding leaders fought as hard if not harder then our leaders.

Your capitalist example is true to some sense and applies mainly to the free market economy in the private sector. Our GDP per capita is ranked ‘only’ about 20th in the world. Given the logic, our GDP per capita should be many more times higher then the highest in the list.

At least for now, from what we observe from the wider world the ministerial salaries of the first world countries should be sufficient to run a ‘first world country’. If we factor the income level of our lowest 30th percentile, we maybe be at the bottom of the first world countries or even not considered a first world country.

YAPdates said...

zixu,

Your arguments are mostly old ones, which has already been addressed previously. The sentiment I pick up is that the salary increments are grossly unpopular, and that the pragmatism machinery and the spread of it, is for lack of a better word, ‘sinful’, as it starts from the mind. Your assertion is also that no utopia can ever exist, and you even mention Canada, albeit with a tinge of sarcasm. Yet your arguments remain basically the same, that the use of money is not the way to attract good leaders, comparing even to those in many parts of society, who are struggling to make ends meet. While you recognize the validity of the capitalism example, I am not sure if my earlier arguments, and its dependencies have been understood correctly. I will instead assume that your intentions are good, and well meaning, and will not engage on arguments that borders on personal attacks. I make myself known openly, rather than hiding under a pseudonym, and hope that readers will know that they are interacting with a known visible person and not an unknown object that is cold and heartless.

Assuming that you do understand, assuming also that your ethical stand is far superior to the stance of pragmatism for the Singapore context, and assuming also that I do not disagree with your premise, what then do you suggest that the government can do to attract new and younger more capable leaders?

Personally, while sympathetic to the large number of negative responses to the salary issue, I am disappointed at the lack of positive constructive ideas from them. It is one thing to shoot down a proposal and do nothing about it. It is yet another to offer an alternative. Most of the Internet arguments that I have read seem to fly off very well initially, but run out of steam when coming to constructive proposals. Otherwise, the case against the salary increase will be watertight.


ks

Zixu said...

Ks,

I did not intend to repeat my arguments, but if you notice carefully I respond to your comments point by point, so it explains the repetition.

I did not assert that no utopia can ever exist.

I took your example of utopia as sarcasm so I respond to it with sarcasm too. I was just trying to mean that it is not utopia to have ministerial salaries in the range what most developed countries have. Therefore asking for our ministers’ salaries to be in this range is not asking for utopia, unless you meant that these countries are already in utopia. Will you like to give an answer to this point and perhaps explain the utopia analogy?

I concede that my arguments remain basically the same. Some principles and truth do not change.

Yes, I recognize that is an example of capitalism. But the reality is that after all these years of leadership by our government. The poor are getting poorer in the midst of expenses, GST getting higher. Our talented leaders had problems informing those in need of the help.
In the case of the example, the big adult is going to get more showers while the thin boy had been getting lesser showers up till now.

Whether or not I had understood your arguments, it should be clearly seen from my counter arguments which are mostly point to point.

Be assured that I mean no harm. I did not and will not make personal attacks. I was very frank and gave advice to you based on my personal opinion. Please to not take them as personal attacks.

I know you are made known openly and I think most readers can tell. Just as I had told you that my name is real.

I do not assume that ‘my’ ethical stance is far superior. A good moral standing is definitely better then pragmatism, irregardless of ‘realities’ (please give an explicit answer, yes or no?). Even PM Lee agreed so by giving away his pay rise to exchange for moral standing. He said that explicitly.

It’s always good to couple criticism with suggestions. But it does not mean that criticism without suggestions has lesser moral standing. Even a senior US politician ‘criticizes’ the pay increases. E.g. if one criticizes the architecture of a building it does not mean that one is capable of being an architect.

Personally, I don’t think you need to be sympathetic, its either you agreed with the arguments or do not.
Contrary to what the government says it is intellectually correct and emotionally difficult issue, I think it can be rationalized totally with the intellect.

I do find that there are good suggestions on the net and in the papers. A common one will be pegging to the salaries to the range of those countries which same some similarities with us. E.g. developed countries, size of population, overall GDP (not just to those top earners), ranking similar to our standard of living.

Low Thia Kiang give a very good suggestion of pegging against the income of the 1st to 20th docile of the poorest and multiply that by 100. Others suggest to set a multiple of the median salaries of Singaporeans. Some suggest reward more to the ministers if the can reduce the Gini coefficient(reduce the income disparity). There are a lot more suggestions that can be found in blogs, forums, opposition website etc.

Personally, pegging against the pay range of similar developed countries is good enough. We can set a substantial part of the income for incentives of reaching some explicitly stated KPIs (key performance index) like improving our quality of life, increasing the happiness index (we ranked very low). I do not think it is so difficult to find talented and passionate young people to join the politics who do not demand multi-million dollars pay. We had seen very credible candidates in the opposition during the last elections. Perhaps you can help to check out how does Canada pay their minister and attract newcomers, we can learn from them. Surely our talented ministers knew that we can learn from other countries which are better then ours on each individual aspect.

With so many suggestions that can be readily found. Do you now agree that the case of the opponents is more or less watertight?

Will you change your stance if the opposing reasons are very logical, rational, intellect and realistic? For those of my counter arguments that you did not respond, can I assume that you agree with me?

I believe that the constructive arguments are good in helping us sharpen our thinking and understanding of each other values.

Zixu

dimpase said...

I wandered into this exchange while searching the web for the figures on ministerial salaries.
I can remark that in democratic countries influx of talents into politics is not motivated by high pay, but by desire to serve the voters, to bring about changes voters desire, etc.

There is a fundamental difference between a country and a corporation – the citizens do not get employed by a country, they are born and raised there, and they are by and large are not free to choose the employer. Therefore any reference to the necessity of paying ministers on par with corporate high–flyers is fundamentally unjust, provided it is a democratic country, of course. However, Singapore is run as a corporation, its citizens are treated as employees rather than citizens (perhaps they aren't too badly treated after all, but that's another story), and these indecently high salaries of public servants prove lack of democracy here, once again.

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