Income Inequality In The Workplace: A Case Study

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Income inequality has been an issue for a long time in Singapore and the government is constantly reviewing and implementing new policies to tackle this problem. Gini coefficient is used as a measure of income inequality. It is a number between 0 1o 1, where 0 corresponds with perfect equality and 1 corresponds to absolute inequality.
According to Singstats, the Gini coefficient in 2013 fell from 0.463 to 0.412. This statistic tells us that the income gap between high income earners and low income earners have decreased, which is a positive thing. The drop in the Gini coefficient is probably thanks to the government as they have implemented various policies and schemes to tackle this problem of inequality.

Budget 2013, tighten foreign worker …show more content…

The tightening of foreign worker policy aims to help businesses to upgrade, create job opportunities for locals and increase wages. In a long term plan, it will put in place a framework to ensure that firms give fair consideration to Singaporeans in their practices. After implementations of the foreign workers policies in 2012 and 2013, incomes of Singaporeans have significantly increased compared to previous years, especially for low wage workers. According to the 2014 budget statement, wages have continued to increase. The wages of the median wage workers have increased by nearly 5% in real terms in 2013. The wages for lower income workers have also grown, with those at the 20th percentile of the income ladder seeing real wages increase by about 7%. Businesses are now hiring more local workers to meet their manpower needs as foreign worker policies tightened. Many business are responding and adapting through the introduction of technology and automation, offering more self-service options to consumers, or offering better and more flexible jobs to attract Singaporean. This encourages Singaporeans, including the economically inactive residents, back to into labour force, picking up job opportunities and reducing the reliance on foreign workers. Singapore’s unemployment rate remains low, maintaining the high level of employment driven by locals. According the Ministry of Manpower (MOM) website, locals employed …show more content…

However, even though the government achieved their goal which is to narrow the income gap, it has attained unintended consequences like foreign firms or investors having second thoughts and thinking more carefully when it comes to investing here in Singapore. This is definitely a con to Singapore’s economy because part of Singapore’s wealth comes from investment from foreign firms and countries. In order to make amendments and improve the tightening of foreign worker policy, we suggest that Singapore’s government should be more flexible when it comes to this policy because different companies will have different needs to be catered to. For example, the service line quota is 7 Singaporeans to 1 foreign worker. However, this is a nearly impossible task for a small company because the company may not need that many workers and that a small company may not be able to afford to hire so many workers. Therefore, for a small company, the quota can be adjusted to 2 Singaporeans to 1 foreign worker according to its required needs that the company ask for. This flexibility of policy will rely on a case by case basis to ensure that other firms do not take advantage of this flexibility. For example, firms writing in implying that they need more manpower for the job but in actual fact, the workers are used to carry

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