Are salaries ever high enough?

There has been a bit of a debate in Singapore about whether ministers and political appointees are paid high enough or not. The reason for this debate goes all the way back to the last time revisions were made to the salary structure over many years, the last one being made in 2007 (before the revisions in December 2011).

There are a couple of arguments to justify the compensation:

1. Singapore has a limited talent pool of capable people. Good salaries in the public sector should be good but not the best to attract/retain people who would otherwise leave for better opportunities in the private sector.

2. Singapore’s unique circumstances mean that comparisons with other countries might not be appropriate.

3. The commitment to clean wages mean that salaries should be transparent – there should be no hidden perks attached.

I have no issues with points (2) and (3). I find that they are reasonably defensible. The avenues for corruption and the erosion of public trust have to remain few and far between. The main problem that people have regarding salaries would then be (1).

In fact, there are 2 components for the arguments in (1):

(a): There is a limited talent pool in Singapore.

(b): People should be compensated well when compared with the private sector.

First of all, I should say that I am not a fan of the “small population” argument. Finland and Denmark have roughly the same population as Singapore. Israel has a population of less than 10M. The Netherlands has a population of about 15M. To say that these countries are bereft of talent would be an insult. To say that small population = small talent pool is simply a failure of imagination. Besides, I’m not a fan of the ‘talent’ argument – the view that there are some people with ‘it’, and others don’t – that to me, is a very impoverished view that fails to see people as having the capacity for ceaseless growth.

Then, there is the argument that people should be well compensated with respect to the private sector.The assumption here is that people are enticed by high salaries, or that high salaries are responsible for good performance.

There are 2 counter-arguments for the above view:

1. Wall Street and the near-collapse of the financial system – an empirical observation;

2. Behavioural economics – and the emerging view that above a certain amount of compensation, the performance level for cognitive tasks does not improve, but degrades.

In other words, paying people lots of money does not necessarily mean good performance.

Why should ministers have their own cars and own landed property anyway? Why can’t ministers stay in HDB flats and take the public transport, like most Singaporeans do? I find this hierarchical mental perspective extremely jarring, especially when these leaders are the ones who say that Singaporeans shouldn’t feel entitled to anything.

Yet, these are the myths that most of us live by, and accept at least subconsciously. I would rather these myths/assumptions be exposed in public spheres, and debated.


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