SINGAPORE — Real median monthly household income from work grew 1.5 per cent last year, the lowest growth rate since 2009 when the Republic was hit by a global financial crisis.

Releasing its annual Key Household Income Trends report on Thursday (Feb 8), the Department of Statistics (Singstat) said median monthly household income — for households with at least one working person — grew by 2 per cent in nominal terms to S$9,023 last year, up from S$8,846 in 2016. Factoring in inflation, the increase was 1.5 per cent in real terms.

When divided among persons in the household, median monthly household income per member grew from S$2,584 in 2016 to S$2,699 last year — increasing by 3.9 per cent after accounting for inflation.

From 2012 to 2017, real median monthly household income per household member grew by 22.9 per cent cumulatively, or around 4.2 per cent per annum.

Real median monthly income for households in the lower 50th percentile grew between 2.1 per cent and 3.6 per cent, slower than those in the 51st to 90th percentile (between 3.7 per cent and 4.5 per cent).

The top 10 per cent of households experienced real growth of 2.6 per cent to S$13,215.

The Republic's Gini co-efficient, which measures income inequality, remained largely unchanged last year at 0.459, compared to 0.458 in 2016. After factoring in government transfers and taxes, the Gini co-efficient last year was 0.401 — the same as in 2016.

Singstat noted that all resident households here — including those with no working persons — received an average of S$4,433 per household member from Government schemes last year. This was higher than S$4,255 in 2016.

Some of the schemes included the NS50 voucher scheme, as well as higher GST U-Save rebates.

Persons living in one- and two-room HDB flats received S$10,245 per household member on average, more than double the transfers received by those living in other housing types.

In 2009, real median monthly household income fell by 2.4 per cent. Since 2013, the growth rate has been between 1.6 per cent and 4.9 per cent annually. In 2016, the growth rate was 2.6 per cent.

Economists TODAY spoke to attributed the lower growth in median household income from work to higher inflation in 2017. In contrast, the Republic experienced deflation in 2015 and 2016.

UOB economist Francis Tan added that income growth tended to trail behind economic growth. So despite a good showing in Singapore's Gross Domestic Product last year, the effect would only be felt this year.

CIMB Private Banking economist Song Seng Wun told TODAY that this reflected the "unevenness" of Singapore's economic growth last year.

"While there was job creation (last year), it was not uniform. For those in the lower percentiles, there are more people looking for work, than there is work available," he added. This points towards a need to create opportunities for the upgrading of skillsets, he said.

Agreeing, SIM Global Education senior lecturer Tan Khay Boon said the difference in growth rates "may imply that the PMETs (professionals, managers, executives and technicians) are (getting) higher income increases compared to (those in) blue collar jobs". "This highlights the importance of … (getting) workers to upgrade their skills and knowledge in order to obtain better living standards," Dr Tan added.

Barring any surprises, the economists expect median household income to grow faster this year, compared to 2017. Amid the Government's productivity drive, "higher income increases are likely to be enjoyed by the middle income groups", Dr Tan said.

But the economists cautioned that in the coming months, higher inflation could weigh down real income growth. Over the longer term, an ageing and shrinking population could have an adverse impact.

Older household members could work less and be less productive due to health issues, Dr Tan noted.

While having more elderly persons participating in the workforce could mitigate the impact, UOB's Mr Tan pointed out that some re-employed older workers might earn lower wages.

Mr Song said that as the population greys and shrinks, the lower income households would require extra attention and more government transfers in order to narrow the income divide.