I was reading about American spending habits, and I reflect upon Singaporean spending habits.
I hear/read stories about people who generally complain about not being able to save or retire. That they are being priced out of the system, they can't make ends meet.
And there's always 2 sides of the argument.
On one hand, there are people who blame the individual. Saying that people shouldn't be spending on Starbucks, iPhones, and that their spending habits are the reason why some people remain poor and aren't able to save or retire.
On the other hand, there are people who believe that wages haven't increased by much throughout the years, whereas the prices of stuff, housing, food, etc have increased by much more than wages.
So mathematically, housing, food and other essentials are taking up more percentage of our income as compared to previous generations.
We always hear stories about our parents generation where they can raise a family on a single income. And on a simple income, like a taxi driver, or forklift driver, stuff like that.
And then people say that that cannot be done anymore.
And that's somewhat true. Wages haven't kept up with inflation.
In America, that's also true, the "American Dream" is dead they say. Cos the average worker cannot afford what his parents afforded. Wages have remained low, cos companies have moved production overseas to China or Mexico. Low value add workers earn a low wage.
Executives fare better.
This is actually the reason why the SG Government keeps talking about quality jobs, and they don't have a minimum wage. When I think more about it, I can understand the reason. (Will write about it tomorrow.)
The thing about it is, both sides to this discussion are right.
Firstly, we have to recognize that the world has changed. Keeping a simple job as a labour worker won't keep an individual ahead of the game.
In the previous generation, this was possible.
But as the world changed, these labour workers aren't as demanded in the economy.
Knowledge based workers are in higher demand and so it pays more.
It's happened before. It's like... horses are no more in fashion cos there are cars. But horses can't complain.
Every age has it's new economy and what is in demand in that economy.
Unfortunately, people CAN complain, they want to be able to achieve everything that their parents achieved by doing the same thing as their parents.
But as the world has changed, this is no longer possible.
On the flip side, when we look at spending, it's a similar story...
Our parents never bought so much sh!t.
It's a new generation now... we have more stuff to buy. We need handphones, mobile subscriptions, Netflix, Spotify, branded goods, laptops, gaming chairs, air-conditioning, etc.
These things just didn't exist for them to buy.
We are in a generation of consumption.
Our parents never had HDBs with air-cons in every room. They didn't need to buy mobile plans, Starbucks, etc... I hardly ate out as a kid, maybe only on weekends.
There was no such thing as spending money on online games. Only rich kids had a game console and each game was expensive so kids would have only a couple of games. Now, kids have many games and many toys.
So the answer is actually Yes and Yes...
Both of the arguments are true.
Wages haven't kept in tandem with inflation.
The cost of basic goods has increased faster than wages have. This is also due the the problem that many jobs are low value add jobs which are low in demand. If we increase the cost of workers, then companies will just shift production to cheaper countries.
The number of high value jobs aren't that many. Even with more education, the number of quality jobs aren't enough. You only need a few hundred computer engineers/programmers to code out a game/software and it's easily replicated to sell to millions.
Whereas manufacturing of clothes is labour intensive and companies will just shift production to low cost countries.
The flip side is also true.
People spend more on stuff that never existed last time.
Premium coffee, avocado toast, luxury bags, eating out more often, computers, phones, etc...
Companies produce products which break easier, cos they expect people to continue to upgrade every couple of years anyway. Read about planned obsolescence. And of course, if it breaks easier, they get to sell more anyway.
So how?
Well...
The solution should be obvious here right?
As an individual, what can we do for ourselves?
Try to get higher paying, higher value add jobs. And spend less buying stuff.
As a Government... well, they have to try to create quality jobs for the citizens.
It's just the way the world works. Each generation will have their own challenges and we have to adapt to things. We can't expect to have the same lives as our parents. The world has changed a lot since then, we have lots of things which they never had. We've traveled a lot more than our parents ever did. Have lots of access to knowledge and information, different forms of entertainment, etc.
It's just a different life.
If we look at it in another way, our parents earned more and spent less.
Whereas for this generation, many people earn less and spend more.
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I hear/read stories about people who generally complain about not being able to save or retire. That they are being priced out of the system, they can't make ends meet.
And there's always 2 sides of the argument.
On one hand, there are people who blame the individual. Saying that people shouldn't be spending on Starbucks, iPhones, and that their spending habits are the reason why some people remain poor and aren't able to save or retire.
On the other hand, there are people who believe that wages haven't increased by much throughout the years, whereas the prices of stuff, housing, food, etc have increased by much more than wages.
So mathematically, housing, food and other essentials are taking up more percentage of our income as compared to previous generations.
We always hear stories about our parents generation where they can raise a family on a single income. And on a simple income, like a taxi driver, or forklift driver, stuff like that.
And then people say that that cannot be done anymore.
And that's somewhat true. Wages haven't kept up with inflation.
In America, that's also true, the "American Dream" is dead they say. Cos the average worker cannot afford what his parents afforded. Wages have remained low, cos companies have moved production overseas to China or Mexico. Low value add workers earn a low wage.
Executives fare better.
This is actually the reason why the SG Government keeps talking about quality jobs, and they don't have a minimum wage. When I think more about it, I can understand the reason. (Will write about it tomorrow.)
The thing about it is, both sides to this discussion are right.
Firstly, we have to recognize that the world has changed. Keeping a simple job as a labour worker won't keep an individual ahead of the game.
In the previous generation, this was possible.
But as the world changed, these labour workers aren't as demanded in the economy.
Knowledge based workers are in higher demand and so it pays more.
It's happened before. It's like... horses are no more in fashion cos there are cars. But horses can't complain.
Every age has it's new economy and what is in demand in that economy.
Unfortunately, people CAN complain, they want to be able to achieve everything that their parents achieved by doing the same thing as their parents.
But as the world has changed, this is no longer possible.
On the flip side, when we look at spending, it's a similar story...
Our parents never bought so much sh!t.
It's a new generation now... we have more stuff to buy. We need handphones, mobile subscriptions, Netflix, Spotify, branded goods, laptops, gaming chairs, air-conditioning, etc.
These things just didn't exist for them to buy.
We are in a generation of consumption.
Our parents never had HDBs with air-cons in every room. They didn't need to buy mobile plans, Starbucks, etc... I hardly ate out as a kid, maybe only on weekends.
There was no such thing as spending money on online games. Only rich kids had a game console and each game was expensive so kids would have only a couple of games. Now, kids have many games and many toys.
So the answer is actually Yes and Yes...
Both of the arguments are true.
Wages haven't kept in tandem with inflation.
The cost of basic goods has increased faster than wages have. This is also due the the problem that many jobs are low value add jobs which are low in demand. If we increase the cost of workers, then companies will just shift production to cheaper countries.
The number of high value jobs aren't that many. Even with more education, the number of quality jobs aren't enough. You only need a few hundred computer engineers/programmers to code out a game/software and it's easily replicated to sell to millions.
Whereas manufacturing of clothes is labour intensive and companies will just shift production to low cost countries.
The flip side is also true.
People spend more on stuff that never existed last time.
Premium coffee, avocado toast, luxury bags, eating out more often, computers, phones, etc...
Companies produce products which break easier, cos they expect people to continue to upgrade every couple of years anyway. Read about planned obsolescence. And of course, if it breaks easier, they get to sell more anyway.
So how?
Well...
The solution should be obvious here right?
As an individual, what can we do for ourselves?
Try to get higher paying, higher value add jobs. And spend less buying stuff.
As a Government... well, they have to try to create quality jobs for the citizens.
It's just the way the world works. Each generation will have their own challenges and we have to adapt to things. We can't expect to have the same lives as our parents. The world has changed a lot since then, we have lots of things which they never had. We've traveled a lot more than our parents ever did. Have lots of access to knowledge and information, different forms of entertainment, etc.
It's just a different life.
If we look at it in another way, our parents earned more and spent less.
Whereas for this generation, many people earn less and spend more.
<<PREVIOUS POST // NEXT POST>>
Did you like this post? If so, could you "blanjah" me 1/4 cup of my morning coffee pls.
You may also consider subscribing to receive the articles in your email, link in the column on the right.
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