Skip to main content

Advertisement

Advertisement

Household incomes in S’pore grew in 2018, income inequality stable

SINGAPORE — Residents from all income groups saw a real growth in average monthly household earnings from work per household member last year, particularly those belonging to the 71st to 90th percentile.

According to SingStat, the 2018 average monthly household income from work — for those headed by a Singapore citizen or permanent resident (PR) and had at least one working person — was S$16,213 for those from the 71st to 80th percentile and S$20,198 for the 81st to 90th percentile.

According to SingStat, the 2018 average monthly household income from work — for those headed by a Singapore citizen or permanent resident (PR) and had at least one working person — was S$16,213 for those from the 71st to 80th percentile and S$20,198 for the 81st to 90th percentile.

Follow TODAY on WhatsApp

SINGAPORE — Residents from all income groups saw a real growth in average monthly household earnings from work per household member last year, particularly those belonging to the 71st to 90th percentile.

Figures from the Department of Statistics’ (SingStat) annual Key Household Income Trends report showed that residents from this group had a higher real growth of 4 per cent in their income. In 2017, the 71st to 80th percentile saw their wages grow by 3.8 per cent, while those in the 81st-90th saw increases of 4.5 per cent.

According to SingStat, the 2018 average monthly household income from work — for households headed by a Singapore citizen or permanent resident (PR) and had at least one working person — was S$16,213 for those from the 71st to 80th percentile and S$20,198 for the 81st to 90th percentile.

The median monthly income last year grew by 3 per cent in nominal terms to S$9,293 from S$9,023 in 2017. After factoring in inflation, the increase was 2.6 per cent in real terms.

The report, which was released on Wednesday (Feb 13), also showed that earnings of those in the 1st-10th and 11th-20th percentiles grew by 2.7 and 2.6 per cent, respectively. In 2017, the growth was 2.1 and 2.8 per cent, respectively.

Overall, households in the 1st to 70th percentiles registered an income growth of 2.5 to 3.4 per cent, while the top 10 grew by 2.3 per cent, said SingStat.

Singapore’s Gini coefficient, which measures income inequality from zero to one — with zero being most equal — also remained relatively stable in 2018 at 0.458 before factoring in Government transfers and taxes. This was similar to the 2017 value of 0.459, said the national statistical office. 

The Gini coefficient last year was the lowest in 12 years and matched that of 2016.

Government transfers and taxes further reduced last year’s value to 0.404, an indication of its “redistributive effect”. 

Residents who lived in one- and two-room Housing and Development Board (HDB) flats benefited the most from Government transfers, which included Goods and Services Tax credits, National Service Bonus and Senior Citizen Bonus, among others.

These households received S$10,347 per household member on average, which was more than double the transfers received by resident households staying in other dwelling types, said SingStat.

Overall, households here — including those with no working occupants — received S$4,494 per household member on average from various Government schemes. This was slightly lower than the average amount of S$4,503 they received in 2017.

WHAT CAUSED HIGHER INCOME GROWTH

Economists TODAY spoke to attributed the higher growth in income for the 71st to 90th percentile to the fairly resilient labour market conditions, which also saw growth in the first half of 2018.

Mr Song Seng Wun, an economist with CIMB Private Banking, said there were certain segments that saw a stronger demand for labour, such as those in the Information Technology, business and legal services and consultancies sectors.

“We see people switching jobs to take advantage of the demand for their skill sets,” he said.

Government regulations to tighten the rules for hiring foreign workers may have also played a part, noted Dr Chua Hak Bin, a senior economist at Maybank Kim Eng Group in Singapore.

With the limits for hiring foreigners extending beyond low-skilled workers to the middle professional segments, this gave Singaporeans more opportunities to apply for higher paying jobs, he said.

Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said that the upper percentile tends to see bigger increases in real income “cumulatively and over time”.

“They may have more members in the family who are employed in higher paying jobs, or they may have more financial assets that are productive,” she said.

As for the comparatively lower income growth for the bottom 20 percentiles, Mr Song said this could be caused by lower skilled workers losing their leverage in securing higher pay due to automation.

This group also includes retirees.

“Just from sheer retirement… the income (earned) drops. But it doesn’t (necessarily) mean they are that much worse off,” Dr Chua said.

Ms Ling added: “I don’t think there is a need to overreact to one particular year of data, but to a more generalised direction or trend.”

A better gauge of how Singaporeans were faring would be the Gini coefficient, which she noted was generally improving. Overall, the figures were encouraging as the rate of growth for all income groups was “quite evenly spread”, she added.

“With a range (in growth) from 2.3 to 4 per cent… considering that you are going across the 10 deciles, this is not bad,” said Ms Ling.

The economists also agreed that there needs to be a continued focus on Government transfers to help the lower to middle class households, as well as providing opportunities for them to upgrade their skills.

Read more of the latest in

Advertisement

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.