Power Resources and Income Inequality in Switzerland and Singapore

Abstract

This chapter endeavors to explain rising inequality in Singapore and Switzerland from a power-resource theory perspective which will be accompanied with the idea of trilemma between earnings equality, full employment, and budgetary restraint. Recent decade has observed rising inequality in two countries, and this chapter mainly argues that the limited role of labor in policymaking process seems to be one but critical explanatory variable in highly decentralized and centralized political context in Switzerland and Singapore, respectively. Besides the role of political institutions, distinct experiences with labor unions, historical evolution of social policies, the need for more integration with world economy, and ageing are also taken into account for a comprehensive understanding of forces behind rising inequality which is instrumented as the gap between top and lower income deciles. This chapter concludes that all forces interdependently play their respective roles; meaning it is difficult to separate one from another. Finally, it calls for being responsive to incessant changes in domestic arena with a focus on shifts in demography, labor demand, aspiration of the youth while maintaining soundness of fiscal capacity.