Starting at the beginning of this year, we keep hearing about how well the economy of Singapore is doing, as it began to recover and follow a positive trend since the last part of 2017. But, for the moment, the households of Singapore are only seeing the numbers, as there are no palpable effects of this economic improvements just yet. Still, the statistics are showing that we are doing better than in 2016. So, according to a report made public by the Department of Statistics, a medium sized household had its income increased by 2% every month starting with 2016. Thus, if this income was around $8,846 in 2016, it reached $9,023 in the year that just passed.
But, of course, the numbers are a bit better than what is actually happens in reality. So, the increase was only 1.5% because we had to think about the inflation as well and cut it from the increase the authorities are bragging about. Still, having in mind that the economy surprised everyone with its improvements that exceeded all expectations, an increase of 3.5% is expected to be recorded during the remainder of the year. Even so, some state that the income of the average household increased by 2.6% in reality, in spite of an economy that was not showing signs of improvement at the moment. According to experts, this happened because of two main reasons.
The first aspect is that the inflation, which followed a negative trend since 2014, reached a positive trend in 2017. Thus, the incomes that were allowed to increase by the negative inflation of 2016 started to be indented by the price increases that happened last year. The second aspect is the fact that improvements in the wage sector are normal to take place with a certain delay after an economic growth occurs. After all, everybody needs to make sure that the growth is real and stable, so it can support the wage increases and other benefits. Francis Tan, who is an economist at the United Overseas Bank, said that if a businessman sees an increase in revenues after a rather long period of disappointment, he won’t jump to paying bigger salaries right away. The businessman needs to be patient and grow the profit, even more, expanding his business even, before he actually has the possibility of offering financial rewards to his workers.
The same happens with the current economy of Singapore. Some measures need to be taken before the income of the average household will be increased. So, besides keeping an eye on the economic growth, everybody should keep productivity under observation as well. If the economy is wanted to continue its positive trend, then productivity should back up the increase in people’s wages. In other words, everybody needs to be more productive if people wish to see a wage increase on a long term. Thus, companies need to become increasingly productive and competitive if they are to afford better-paid workers and still enjoy a profit. The Government already had this in mind, preparing various schemes and even programs that are meant to stimulate the productivity of various companies in Singapore. Productivity in the country increased with 3% in 2017, which is the most significant increase in this sector since 2010, although the improvement is not due to internal progress, but external factors, more precisely a better global trade. So, there is the need to do something from the inside as well, in order to maintain all the good things that are happening with the economy and productivity.
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