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10/09/2006

imported inflation?

1970 A fresh graduate started at $1,000. Cpf 6%. Take home pay $940. Mother got $200. $400 went to car and maintenance. Left with $340. Still a lot of money then to swing around. 2006 Fresh graduate gets $2000/$2800. CPF 20%. Take home pay $1,600/$2,240. Mother gets $400. Balance $1,200/$1,840. Owning a car will be down $1,200 average a month. ($500 for instalment, Insurance and road tax $120, petrol $400, parking and ERP $180). For those earning $2,000, forget about owning a car. For those earning $2,800, $640 left. $640 today is nothing compare to $340 in 1970. Are we better off? Oh imported inflation? ARF and road tax are not imported inflation. So is insurance which is pegged to the high price of a car due to taxes. ERP and parking are not imported inflation. Even petrol is not all imported inflation if the tax element is lower. Singaporeans should not think that by increasing their wages, they are better off. The wage increase is only meaningful to people who are earning $100K or $1 mil annually. To these people, 10% increment means $10K or $100K increment. To those earning $30K annually, it is only $3K, barely enough to cover the rising cost of living. It is a case of piling at the top of the heap and pinching at the bottom. And the conventional wisdom today is that this is a good thing, a natural thing caused by globalisation.

12 comments:

Anonymous said...

I've been brought up on one basic principle. Live within your means. If people start to practice that, they'll soon find $640 or even $64 will go a very long way.

redbean said...

that is a wise principle to live by. the question is how to tell people that they are now poor and cannot afford to live well or how to tell people that they are rich but cannot to live well.

Anonymous said...

Well, unless someone's dozed off for 10 years, the average joe or jane on the street knows that life has gotten tough. Are Singaporeans really that dependent that they have to have the government to tell them they are not as well off as they were a decade ago even though they know that to be the case ?

Anonymous said...

2 assumptions i beg to defer from:
1)big deal to be a grad
2)big brother owes us a living.

sorry TIMES HAVE CHANGED boss.

while the cream were once plain grads when there were only so many in the 70s, today there are zillions of them. unlike bfore we now have tons from the ivy leagues (n yes today's cream).

it wud be more correct thus to benchmark the current day's plain vanilla fresh grad against that of a junior executive equivalent of an empowered clerical executive of the 70s, instead of some newly arrived hotshot-to-be. so a clerical executive maintaining a car in the 70s with his $300 earnings wud be whining exactly the same you did.

Anonymous said...

You must have heard about the MBAs on the streets of india and the philippines; and that the more fortunate graduates in China wait on diners's tables and/or rotate shifts as Hotel front office staff. Tell me then are singaporeans a virtually different breed becos they are born smarter and therefore deserve better?

Anonymous said...

..how to tell people that they are now poor and cannot afford to live well or how to tell people that they are rich but cannot to live well.

How to tell the govt that they should maintain the status quo of the 70s when there were so much opportunities to succeed in business and little competition to hold one back?

redbean said...

i will fully agree with you if the singapore govt declares that singapore is no longer a nation and every position in the country shall go to the best man at the most competitive price. and no one needs to do national service to defend this country since it is no longer a country with mutual obligations and responsibility between people and state.

Anonymous said...

They don't have to say it redbean. Just observe their actions, and anyone with the IQ of a common squirrel will be able to see what it means.

redbean said...

i always believe in actions rather than words.

and i also believe that singaporeans are no fools.

Anonymous said...

Well, I think you'd better revise that belief because the facts suggest otherwise.

Anonymous said...

Any population who lets an arrogant, power-hungry dictator lord over them for 47 years, and all the while blatantly trampling on their basic human rights are fools in even a fool's book.

redbean said...

i would say complacency rather than arrogant. singaporeans are like the proverbial frog inside the boiling pot. no longer feel the heat. acclimatised.

take a frog from a pond and throw it in it will jump out straight away.