Reader Response Final
In the article, “Why it’s time to take a
good, hard look at wealth inequality in Singapore”, Jeff Onn (2014) summarized
Sudhir Thomas Vadaketh’s article about wealth inequality in Singapore. Vadaketh
argues that wealth inequality results in social strain and discrimination. He
states that it affects a person’s sense of fairness which can lead to the loss
of confidence in the fair ways of meritocracy among people. In addition, wealth
concentration can exert an influence on the public and prompt them to question
a country’s state of equality. Wealth inequality also results in monetary
wastage and social instability. The
solutions he provides are taxation, such as capital gain tax and inheritance
tax, and redistributing wealth to improve educational, employment and general
life states for the low income. Indeed, wealth inequality is a problem of great
concern, however, wealth inequality also has positive impact such as a highly
motivated workforce and entrepreneurship.
Undeniably, wealth inequality results in
monetary wastage. However, these monetary wastage can actually serve as a
motivation for people. For example, a car provides convenience, but a BMW car
would result in convenience and self-satisfaction. The sense of achievement in
having bought a luxury good after working hard for it makes people motivated. An
article, “Luxury goods shoppers in S'pore plan to spend more”, posted by
AsiaOne states that three main motivations behind shoppers’ purchases are
self-reward, brand prestige and feeling extraordinary. This shows that while
wealth inequality results in monetary wastage, it is not necessarily a negative
aftermath. It serves as a reward that people would look forward to after
working hard on a task or a difficult situation.
With wealth inequality, people will strive to be
at the top end of the inequality ladder and since Singapore is a financial
centre with low tax rate, it is easy to increase one’s wealth through many
approaches, one being entrepreneurship.
Entrepreneurs are encouraged by the potential large increase in wealth
and low tax rate to take risks and start up their businesses. This in turns
helps to grow Singapore’s economy. According to Global Entrepreneurship Monitor
2012 Singapore Report, Singapore placed second among 25 chosen global economies
in having one of the highest percentage of Total early-stage entrepreneurial
Activity (TEA) of 11.6%. Furthermore, in the 2014 report, it is stated that the
TEA for Singapore has remained higher than 10% over the years and Singapore is
still one of the top few entrepreneurial nations. With more businesses being
set up, this would result in more job opportunities for others. SPRING
Singapore is an enterprise that helps nurture start-ups, and stated in their
2014/2015 annual report, SPRING managed to create 22,280 new jobs from their
projects. This has been an increase from 15,895 in 2010. An increase in
start-ups would result in an increase in gross domestic products (GDP), which
means an increase in Singapore’s level of economy. Furthermore, there would be
an increase in job creation, which would decrease Singapore’s unemployment
rate.
Although Vadaketh pointed out many adverse
impact that we should be concern about, there are positive impacts such as motivated
citizens and growth in Singapore’s economy that we should not overlook.