Thursday, August 28, 2014

What does ASPIRE, plunging legal starting salaries and the ACS-LTA fracas have in common ?

As it turns out three recent events have something in common.

ASPIRE is government's much welcomed attempt to officially acknowledge the importance of Polytechnic and ITE graduates in our economy. I think investors will be very happy with this development because if executed correctly, Singapore will have a prosperous and vibrant middle-class and they won't feel very strongly about delaying their entrance into the working world just to get a piece of paper. My only caution is that for this to work, the foreign labor participation must be curbed. No sane employer will take on our Poly and ITE grads if Masters degree graduate from other parts of the world will cost half the price.

The second issue is that now we law students have been asked to keep our expectations low as the supply of incoming law graduates outstrip demand. Contrary to what you might think, I actually welcome this development. The over-supply is not due to foreigners but locals with overseas law degrees and we should not begrudge our fellow citizens. Singaporeans deserve a fair fight for a training contract. Imagine the kind of competition we engineers were made to face for the past 15 years : Foreign competition has been so relentless, engineering salaries have made technology one of the worse sectors to get into in this country.Compared to what engineers faced, what's happening to lawyers is nothing.

The third event is very interesting.

ACS gets their first Wee Shu Min incident !

There is a lot of public anger over ACS's booking of six MRT trains to get to a stadium. To ACS' credit, the transport was well thought-out and public inconvenience was minimized. But I doubt this issue is about public inconvenience. As my lecturer would have said, " How dare you ! " The public's concern is whether can a group perceived to be well-to-do, marshal state resources for their benefit simply because they can and have the funds to do so. I predict a very public rebuke directed at MRT to appease the masses, but I also expect private censure to be very minimal. LTA needs to play their cards well to handle this incident: The optimal move is public censure and private indifference.

To help you think about this issue further, let me ask you this :

a) If RI or HCI books the trains, how would react to this incident ?
b) If ITE booked the trains, how would you react differently ?
c) What if lawyers or the Adminsitrative Service booked an MRT train to attend a dinner and dance ?

I believe the reactions would all be very different.

There is a central thread in what policy makers are trying to do - That central thread in all these events is Game Balance.

Imagine Singapore as a Diablo III game, would it make sense to design a country like this :

a) If you are ACS, RI, doctor or a lawyer, you play the game at Easy Mode.
b) Other graduates play the game at Normal Mode.
c) If you are Poly, you play the game at Hard mode.
d) If you are ITE, you play at Torment 6.
e) If your are a scholar, you play at God mode.

It won't make sense to do this to people. You can only push us this far.

Good games require great game balance. That's why Diablo III repeatedly patches itself.

After 2011, to reduce social and economic inequality, the government has to do two things:

The first is to generate a better career path for ITE and Poly graduates with a better quality of life. I urge the investor community to welcome this change because our economy can benefit from a vibrant middle class. More money for middle class, more revenue, and for me, higher rents to collect. Support this out of self-interest.

The second and harder consequence to bear is that the strong will be nerfed or brought down. As the inequalities need to be addressed before the next elections, some people need to be brought to the average watermark.

It begins with lawyers, but it won't end there.

I predict the following :

a) Doctors will increasingly face foreign competition if only to keep medical costs down.
b) Regulation will make banking sector less attractive then the high tech sector.
c) Investors will face higher interest rates and lower tax breaks, but Singapore will only levy capital gains and dividend taxes as a last resort.
d) There is one Phd driving a cab. We have yet to see a lawyer or doctor do this.

In 2011, Singaporeans have started becoming very vocal against social inequality. In fact, I would want to believe that once we resolve our transport woes, that is the only thing Singaporeans have to gripe about.

What we are seeing is the beginnings of a resolution of this unhappiness.

This is only the tip of the ice-berg.

I leave you to decide if the second consequence is something that is fair to some Singaporeans. I am undecided for now.

[ A friend informed me that my article is very similar to this one :

But hey, let's not go there. In the Singaporean context it can be seditious.]

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