Econ Growth Not At Odds With Reducing Inequality

Econ Growth Not At Odds With Reducing Inequality

by REACH Singapore

27 Oct 2018 07:45PM

Deliberately slowing down Singapore's economic growth will not help tackle inequality, but will instead make everybody worse off, said Manpower Minister Josephine Teo yesterday (26 Oct).

"It will have the harshest impact on the bottom," Mrs Teo said. "Jobs will be lost and incomes fall for those at the lower end of the workforce, while at the top end, those with the talent or entrepreneurial ability to seize opportunities elsewhere will up and go."

She pointed out that slowing down growth "so that those behind can catch up" may sound like an intuitive solution to inequality, but the evidence suggests the reverse.

Much of Singapore's growth since 2000 took place between 2004 and 2007, when its gross domestic product (GDP) grew by an average of 8 per cent yearly. Median income adjusted for inflation grew by 20 per cent during that decade, and "virtually all" of it happened during that four year period.

"By going for growth when the conditions allowed, we offset the downturns we experienced earlier in the decade," Mrs Teo said. "In the process, we reduced unemployment and raised wages for Singaporeans after the standstill in the first part of the decade."

She added that slow growth will not ensure a more equal society as long as we live in a globalised world.

Mrs Teo was speaking at a panel discussion during a conference organised to celebrate the 30th anniversary of the Institute of Policy Studies (IPS).

Source: “Slowing down economic growth will not help create a more equal society: Josephine Teo” (The Straits Times, 27 October 2018)

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