20141013 Livelihood of Singaporean hawkers destroyed by the PAP

Hawkers provide an essential service but many are not justifiably remunerated. Running our country as Singapore Inc, the PAP has allowed skyrocketing rental to kill off many businesses, hawking included.

Instead of addressing this issue, PAP’s ‘solution’ is to replace Singaporean hawkers with as many foreigners from third world countries as possible. Presently, 90% of hawkers in shopping mall food courts are foreigners. As a result, the quality of authentic hawker food has deteriorated over the years.

Our top civil servants have come up with another ‘brilliant’ idea “to encourage hawker-entrepreneurship and preserve hawker heritage”. Does the PAP, with zero business sense and only knows how to profit from citizens, even know anything about entrepreneurship? Are we expected to believe a non-swimmer could actually be the national swimming coach?

In the past, hawkers were well rewarded for their hard work prior to the privatisation of public goods and services. Most of the problems started after the PAP had implemented the ‘asset enhancement’ policy which caused rental to spike out of control.

How much income (net profit) does a hawker need? Obviously not $2,000 in high cost Singapore as one might just as well be an employee. Bear in mind that a certain amount has to be set aside for retirement savings as well as CPF Medisave.

As a small business, a monthly income of $4,000 to $5,000 would be reasonable. But this is not easily attainable as evidenced by the thousands of local hawkers who have gone out of business due to high rental.

The PAP is THE landlord in Singapore and controls both the demand and supply of land. In other words, there is no real free market as rental is really determined by the PAP ie increase population density to increase rental and vice versa.

I will just use the example of a nearby food court with a monthly rental of $3,000, a $50 daily-rated assistant at $50 and $20/day cleaning services. (only 2 stalls have remained for 10 years with the rest repeatedly closing shop shortly after they had reopened) We can easily calculate how much revenue is required to earn a decent income.

Assuming raw material to be 30% of total cost, a hawker needs to sell 50 bowls at $5/bowl to break even and 70 bowls just to make $65 for the day. What about miscellaneous unforeseen costs such as equipment repair? Of course one could sell a higher quantity in, say, a shopping mall food court. But bear in mind the cost of rental is likely to be more than double and hawkers are also at the mercy of unscrupulous food court operators.

DAILY COSTS – $5/BOWL 50 BOWLS 70 BOWLS
RENTAL $100 $100
LABOUR $50 $50
CLEANING SERVICES $20 $20
RAW MATERIAL $75 $105
GAS AND WATER $10 $15
TOTAL COST $255 $290
REVENUE $250 $350
INCOME/PROFIT ($5) $65

Of course the government would like food to be affordable. But by reducing the price per unit, one needs to sell a higher quantity just to break even.

Reduced per unit cost means a lot more work for hawkers.

DAILY COSTS – $3 /BOWL 70 BOWLS 100 BOWLS
RENTAL $100 $100
LABOUR $50 $50
CLEANING SERVICES $20 $20
RAW MATERIAL $35 $50
GAS AND WATER $10 $15
TOTAL COST $215 $235
REVENUE $210 $300
INCOME/PROFIT ($5) $65

But why should high rental be maintained at the expense of hawkers?

The PAP government has wrongly assumed it can profit from high rental but expect hawkers to reduce their selling price.

Of course some will be able to earn a decent income.

eg.

DAILY COSTS – $5/BOWL 100 BOWLS
RENTAL $100
LABOUR $50
CLEANING SERVICES $20
RAW MATERIAL $150
GAS AND WATER $20
TOTAL COST $340
REVENUE $500
INCOME/PROFIT $160

But it’s not really a lot of money considering the sacrifices and after deducting a certain percentage for retirement savings.

Of course there are success stories but hawkers deserve every cent from their hard work. It’s unlike the PAP who can just increase their million-dollar pay at the stroke of a pen by simply opening their mouths in Parliament.

Conclusion

Rental is the No. 1 killer and high rental cost also leads to higher wages.

Instead of tackling the issue head on, the PAP prefers to mask the issue with cheap labour from third world countries. It is not bothered about hawkers losing their livelihood. The PAP only wants to generate economic activity by increasing the population, a shortcut it has been using for more than 2 decades.

After wages have been depressed by foreign workers, the PAP also turns around and accuses citizens of being choosy. Wages are obviously too low for our high cost of living or citizens who earn up to $1,900 would not be entitled to government handouts. Perhaps it has all the while been PAP’s plan to rid Singapore of local hawkers and replace them with foreigners for big boys like Kopitiam, Koufu, etc?

Foreigners who are simply employees are not bothered about hygiene issues. They are only here for the short term to make some money.

Singaporean hawkers will soon be extinct and the PAP is solely responsible for this situation. In time to come, most local hawkers will be replaced by PRCs.

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4 Responses to 20141013 Livelihood of Singaporean hawkers destroyed by the PAP

  1. Xmen says:

    It will shock many that Taipei street food prices are much cheaper than Singapore. Even food court at Taipei 101 is considered cheap by Singapore standard. Rental cost is definitely the key. My point is Singapore can still be affordable if its rental cost is in check.

    • phillip ang says:

      The PAP cannot allow others to make money through their hard work. Wherever there’s money to be made, it will have its fingers in it. It does so indirectly by getting the big boys operators to manage, amend legislations to accommodate foreign workers. Prices go up, GST, GDP, etc Citizens are always getting screwed by PAP’s priority in making profit.

  2. James Fuk says:

    Sorry if I come across as being pedantic. But I take issue at this particular line.

    “Presently, 90% of hawkers in shopping mall food courts are foreigners. As a result, the quality of authentic hawker food has deteriorated over the years.”

    Food court employees are NOT hawkers. They are merely employees of a large corporation (e.g. Breadtalk Group – Food Republic)… they have no vested emotional or economic interest in ensuring customer satisfaction. They sell a brand. They just go through the motions. It is not unlike National Service.

    It is no wonder that these corporations (with the blessings of the PAP govt) hire a large pool of cheap foreign workers to staff their eateries, and their CEOs (e.g. George Quek) are constantly seen getting chummy with PAP politicians.

    I agree with the gist of your article. High rent destroys businesses, and we know who is the biggest landlord in Singapore. I have seen many small businesses ranging from bakeries to barber shops to provision shops closing down after a housing estate had undergone some upgrading project. I’ve talked to the shop owners themselves, and they are unanimous in saying that rent is the killer. Some of the luckier(?) ones manage to hang on by subletting one half or two thirds of their shop space.

    In closing, anyone who continues to support the PAP govt:

    1) Has benefited directly or indirectly from the systemic cronyism.
    2) Lacks moral conscience.
    3) Is highly delusional.

    Not only does the PAP need to be voted out, measures must be taken to eradicate their heinous materialist, neoliberal ideology, purge it from our national psyche, and ensure it never takes root again.

    • phillip ang says:

      🙂 PAP is only pro big biz – fastest way to increase prices and GDP. We need real solutions which the PAP clearly does not have. So we do need to replace the PAP with a competent government.

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