Household Income Rises Again
The latest household income data released showed good news for all Singaporeans, especially for the poorest families on the island. The figures, which are for the whole of 2015, reveal that households from every income group earned more, with those in the lowest 30 per cent seeing the fastest growth in terms of real income.
This will be very welcome news for residents, with talk of a possible slow down and even worse doing the rounds in other countries around the world. It is also continuing the trend in recent years of an improving economy, not just on paper but one that can actually be felt by people in their everyday lives – particularly by those who are most in need of it.
In a little more detail, the figures (from the Department of Statistics’ annual Key Household Income Trends survey) show that the median household income from work in 2015 was S$8,666. This is compared to S$8,292 in the previous year. When taking into account inflation this is an increase of 4.9 per cent, or in dollars and cents it means that a family will have S$374 more in their pocket.
The figure has been rising year on year:
• 2010 – S$6,342
• 2011 – S$7,037
• 2012 – S$7,566
• 2013 – S$7,872
• 2014 – S$8,292
• 2015 – S$8,666
As stated however, the news is even better for the lowest earners. The real income growth for the lowest 10 per cent was 10.7 (on a per household basis), while that for the next two lowest deciles were 8.3 per cent and 7.2 per cent respectively.
At the other end of the spectrum, the highest earning 10 per cent saw their income increase by 7.2 per cent.
Though these figures are both strong and encouraging, they should be taken with at least a small pinch of salt. One of the major contributing factors to the increase is the aid given by the government such as the workfare income supplement programme and the pioneer generation package. The GDP for 2015 was 2 per cent, and in the future it is productivity growth that will need to drive and fund these increases. As S Iswaran the Minister for Trade and Industry put it himself “the only sustainable way to keep wages – real wages – growing, is for it to be underpinned by productivity growth”.
Over the last five years, real wages have grown by around 3 per cent. In that same period productivity has grown at between 0.3 and 0.4 per cent. Mr Iswaran went on to say that “If real wages continue to outpace productivity growth, then we are impairing our economic competitiveness and that will have, certainly an impact on the longer term, but even in the short term on the businesses and sectors.”
Of course there are schemes in place to increase productivity, and overall the outlook is a positive one. Experts predict that though increases in real income are likely to slow in coming years as a result of the shrinking worldwide economy, here in Singapore it is still likely to be over and above the GDP.
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