Why am I underwhelmed to hear of the government ministers and top civil servants taking huge pay cuts next year? That is because the rich, people earning a million dollars and upwards a year, can afford to lose a couple of hundred thousands of dollars any time. It will not affect their day-to-day expenses - nobody needs to start eating beans and porridge instead of the power breakfasts, power lunches and power dinners. I would also surmise that it wouldn't affect whatever downpayments they may have on the house they live in, nor would it upset the family budget in any significant way.
While I acknowledge PM Lee Hsien Loong's gesture that he will donate his increments to charity for the next 5 years (demonstrating that he doesn't need the money, anyway), his Ministers are not in any practical way less well-off after the 19% cut.
On the other hand, why am I worried? If this signals to employers to cut people's pay, then hardships may be the order of the day. If I earned $3,000 and I get even a 10% pay cut, and I have 2 kids and my wife just lost her job, that may drive me to eating beans and porridge for breakfast, lunch and dinner, or maybe even skip a meal, which will be detrimental to my health. We all know that we can bear with the beans and porridge, but we just cannot afford to be hospitalised. Not in Singapore, not ever. That'll kill whatever savings we may have, savings that are suppose to tide us over the next few years of 'famine'. Yes, the Health Minister has promised that he will be compassionate as far as the bills are concerned, but that'll turn us all into beggars of sorts (begging the hospital to waive the high charges, i.e.) wouldn't it? You wonder if we have made any progress in the last 40 years or so where healthcare costs are concerned.
And what about all those monthly payments for the housing loan, which is likely taken from my CPF account. My monthly contributions to that CPF account will be reduced together with the pay cut. Do I have to fork out extra cash every month? The alternative, of course, is to sell the house and downgrade. But in these depressing times, selling the house will be the last resort. You don't want your house to be someone else's discount opportunity of a lifetime.
Already, DBS is playing follow the leader. I am not sure that this leadership by example is an example which all of us salaryman and woman want our bosses to follow, nor can afford for them to follow.
Image: morgueFile.com. Author: Orchid