SINGAPORE, Jan 22 — A new report by the World Economic Forum (WEF) on social mobility has found that despite outperforming its South-east Asian neighbours, Singapore ranks 20th out of 82 countries surveyed.
Social mobility is broadly defined as the ability of a child to have a better life than their parents and the impact of a person’s socio-economic background on their success in life.
The inaugural Global Social Mobility Report 2020, released on Sunday (Jan 19), estimates that if Singapore is able to increase its performance by 10 points on the index, the resulting growth would add US$2.4 billion (S$3.2 billion) to the nation’s economic output every year.
The top performing nation Denmark scored 85.2 points out of 100, while Singapore scored 74.6 points.
Japan in 15th spot was Asia’s top performer with 76.1 points, and the only other Asian nation in the global top 20.
The report also found that Singapore scored well in areas such as education and healthcare, but was lagging behind in others such as fair wage distribution and social protection.
Like Singapore, Nordic countries such as Denmark, Norway and Finland — which took the top three spots respectively on the Global Social Mobility Index — also scored well in education and healthcare.
They stood out from Singapore in categories covering work opportunities, fair wage distribution and working conditions.
WEF said that it created the index in response to the challenges that global economies are facing.
For instance, it said that a person’s chances in life are increasingly determined by various socio-economic factors they inherited at birth.
The index, it added, serves as a tool to enable policymakers and leaders to identify areas for improving social mobility and promoting equally shared opportunities in their societies.
Here is a look at the key findings from the 218-page report which ranked 82 global economies according to their performance on five key aspects of social mobility covering 10 criteria:
Education (access, quality and equity, lifelong learning)
Work (opportunities, wages, conditions)
Protection and institutions (social protection, inclusive institutions)
What Singapore did right
WEF gave Singapore its top score for health with 91 out 100, which put it in 7th place globally, with Cyprus in top spot.
The organisation said that a country’s ability to provide high-quality healthcare to their citizens is a crucial factor that has an impact on social mobility.
On education, Singapore is in the top 10 globally. The report said that education and human capital development strategies have traditionally been considered factors that favour social mobility.
This is a breakdown of how Singapore fared for education:
Education access score: 84/100. Rank: Eighth (Top spot held by the Netherlands)
Education quality and equity score: 86/100. Rank: Fourth (Top spot held by Sweden)
Lifelong learning score: 78/100. Rank: Third (Top spot held by Switzerland)
Despite the good showing by Singapore in this field, WEF said that it could expand its social diversity within schools by ensuring that schools have a good mix of students from different socio-economic profiles.
Based on the index, Singapore scored 60.1 in this area, which placed it in 34th position. Norway was the best performer in this area.
Where can Singapore improve?
What pulled Singapore’s score down was the relatively poor performance on fair wage distribution and social protection, in which it was ranked 51st and 61st respectively.
The report stated that Singapore’s labour market has a low unemployment rate for workers with basic, intermediate and advanced education, which translated into a score of 81.8 on the work opportunities pillar.
However, it added that there is significant room for improvement in terms of offering fair wages. As it stands, the income share of the bottom 50 per cent of the population represents only 25.7 per cent of the labour share of the top 50 per cent of the population.
Social protection, which essentially measures how workers are protected, was Singapore’s lowest scoring area.
The report stated that traditionally, policies worldwide have been focused on legislating to protect and promote full-time permanent jobs.
“In high-income economies, this focus persists even as non-standard work increases without recourse to similar benefits and protections,” it said.
However, it added that there needs to be a change of policy mindset that focuses on protecting people rather than jobs.
“A policy programme that looks holistically at the protections and support that individuals need throughout their working lives, regardless of their status, is likely to be more effective in the current context.”
Suggestions for improving social mobility
The report said that businesses have a critical role in promoting social mobility.
One suggestion given is that business owners could consider enrolling more young people into vocational and education training (VET).
“This would typically imply hiring apprentices and providing them with on-the-job training and, often, a minimal wage,” it said. “It is widely acknowledged that VET programmes represent effective routes into professional life and a real alternative to the graduate track.”
Other suggestions, which could potentially reduce discrimination, include curriculum vitae anonymisation — typically by omitting name, age and location of candidates.
The payment of fair wages to allow employees to meet basic needs is another effective way to contribute to upward social mobility, and so is the elimination of the gender pay gap, the report said.
‘Don’t rely on it for policymaking’
Experts told TODAY yesterday that while the index was useful in pointing out pertinent issues, they were concerned about the validity of some aspects.
For instance, Associate Professor Walter Theseira from the Singapore University of Social Sciences pointed out that the International Labor Organisation (ILO), which contributed to the labour income share statistic used by WEF, cautioned that the data was not to be used for country comparisons or rankings because the data was subject to high levels of uncertainty.
“WEF has ignored this caution,” the economist, who is also a Nominated Member of Parliament, said.
“My take on the WEF report is that it is a conversation starter on important issues for Singapore,” he said. “But several key measurements are deeply flawed and should not be relied on to make policy.”
Touching on Singapore’s score for fair wage distribution, Theseira said that it is due to the heavy presence in the economy here of some industries with “very skewed compensation structures” — such as high-end business services in finance, consultancy and the legal profession.
“The top performers in those fields earn multiples of the average worker in the same industry, and many more times workers in other industries,” he said.
He warned that adjusting the compensation structure would mean that Singaporeans would have to be willing to accept the possible effects on the business climate.
This, he said, includes driving away some enterprises if Singapore either started exerting pressure to reform pay, or increased taxes on the top income earners.
“There is probably more room to reform wages at the lower end,” Theseira said. “But that also requires a proper comparison of like-for-like for greater understanding. This is not done or provided by the WEF’s report.”
Singapore Management University sociologist Paulin Straughan said that while the Nordic countries topped the index, it is also not useful to keep asking if Singapore can be like them.
Firstly, she said that these countries are able to offer generous welfare packages due to their high taxation.
Secondly, in terms of ideological values, she said that they place a premium value on family time. A country such as Norway is able to do this due to the natural resources which they can rely on to drive their economy, whereas Singapore has just its people to rely on.
“It’s not a matter of (what is) better or worse. It is what works for us in our part of the world,” Prof Straughan stressed.
“Can we afford to put so many barriers in place for labour engagement? Are we willing to support an entire community through higher taxes?” she said. “Those are hard questions that we have to answer.”
Sociologist Tan Ern Ser of the National University of Singapore said that measuring the relative share of the different income categories may provide useful indicators, but he believes that what is more important is that all citizens should have access to a decent quality of life and equality of opportunity.
“I believe the bottom line for social policy is that we should meet the basic needs of all citizens, and better still, ensure that all have access to a decent quality of life,” he said. — TODAY