SINGAPORE — While the U.S. unemployment rate “dropped” to 7.7 percent last month — a figure even The Washington Post acknowledged was due “…in large part because the labor force fell by 350,000…” — here in this modern and prosperous city-state of slightly more than 5 million people, unemployment is practically nonexistent.
A taxi driver tells me, “Everyone here works.” With unemployment at an astonishingly low 1.9 percent, he is nearly right.
In part, this is due to a work ethic that seems to be in the genes here. But there is something else at work that should astound Washington politicians struggling with expensive “entitlement” programs and with those who receive them.
The Economist wrote about it in a 2010 article. What contributes to Singapore’s prosperity and a vibrant economy that includes a stable currency and a rising stock market, it said, is this: “The state’s attitude can be simply put: being poor here is your own fault. Citizens are obliged to save for the future, rely on their families and not expect any handouts from the government unless they hit rock bottom.”
As a parent, this is my favorite part of the article: “The emphasis on family extends into old age: retired parents can sue children who fail to support them. In government circles, ‘welfare’ remains a dirty word…”
Things may be starting to change, at least in other parts of Asia. In September, The Economist revisited the subject of entitlements: “Thanks to years of spectacular growth, more people have been pulled from abject poverty in modern Asia than at any time in history. But as they become more affluent, the region’s citizens want more from their governments. Across the continent pressure is growing for public pensions, national health insurance, unemployment benefits and other hallmarks of social protection. As a result, the world’s most vibrant economies are shifting gear, away from simply building wealth towards building a welfare state.”
The magazine says government leaders in parts of Asia want to learn from the mistakes that backers of entitlements have made in the United States and the United Kingdom. What they should remember is that once the idea of entitlements catches on, it must inevitably replace the work ethic for significant numbers of the population. The threat of an empty stomach is a great motivator for an otherwise able-bodied person, but for many a guaranteed check and other benefits undermines that ethic and encourages dependency on government.
Consider America’s 99-weeks of unemployment benefits and the nearly 47 million people receiving food stamps. Even a suggestion that such benefits be cut prompts demonstrations, TV commercials from activists and political damage (recall Mitt Romney’s “47 percent” remark). Reliance on government can — and often does — damage self-reliance. It is a reliance on self as a first resource and government as a last resort that not only improves individual lives, but national life.
Singapore appears to be a holdout in this Asian entitlement revolution. And why shouldn’t it? As The Economist reports, “…government spending is only a fifth of GDP but schools and hospitals are among the best in the world.”
Why would so many other Asian governments flirt with entitlement programs when economic growth has brought prosperity to so many who have never known it? Why not focus on more growth and a broadening of prosperity to even more?
Unfortunately, Singapore has at least one black mark. Its Ministry of Manpower estimates that it has more than 200,000 foreign maids. Yet it has no minimum wage policy. Many maids make as little as S$420 (US$337) to S$450 (US$360) a month. They should be treated better. And starting January 1 perhaps they will be. Beginning then, all new maid contracts will have to offer at least S$450 (US$360) and one day off a week. To treat these workers any less equitably would be a stain on the entire country.
That said, Asian nations should not be looking to the West’s dubious entitlement programs; rather they should follow Singapore’s example, which leads to independence from government and personal empowerment.