By Leong Sze Hian

I refer to the article “Economic growth key to dealing with rising costs: PM: He says incomes must rise more than inflation, and growth means more income” (ST, Feb 9).

It states that “Prime Minister Lee Hsien Loong reiterated that while measures can be taken to deal with rising living costs, the way to deal with the issue was by growing the economy so that real incomes rise more than inflation.

He said on Thursday that when the economy grew by 7.5 per cent last year, incomes did not just rise at the top end, but across the board. ‘Even (at) the bottom, the middle, everybody’s real income went up'”.

In this connection, I would like to refer to various statistics available, for various available time periods, in respect of median monthly incomes (full-time and part-time), median monthly incomes (full-time), median monthly incomes for part-timers, household income, average incomes, private homes versus public flats incomes, etc.

Although the median gross monthly income of full-time employed residents has grown 2.9 per cent a year in the past decade to $2,040 as of June 2006, the number of part-timers has more than doubled over the decade from 51,400 to 112,300, expanding their share of employment from 3.5 per cent to 6.3 per cent.

The median monthly income for all employed residents (full-time and part-time) stagnated at $2,000 for the years 2001 to 2004.

Income grew by only $40 to $2,040, from 2001 to 2006, or 0.4 per cent per annum. Income growth may have been negative, after adjusting for inflation for the last five years.

In January 2008, the Minister of Health, in moving for the implementation of means testing starting at the median income cited the figure of $2,170 for full-time employed residents.

However, the median income for full-time employed residents may not be the same as that for employed residents (full-time and part-time) cited in previous statistics.

Even if we discount any such differences, does this means that the median wage growth from 2001 to 2007, was only 1.4 per cent per annum?

Also, the incomes of about 30 per cent of households at the bottom have not caught up with inflation, and have declined in inflation-adjusted terms from 2000 to 2005.

According to the Minister of State for Trade and Industry’s (Mr Lee Yi Shyan) maiden speech in Parliament in November 2006, “the monthly income of the lowest paid group declined between 2000 and 2005. At the household level, between 1990 and 2005, households in the lowest 20% actually saw their household income decline over the same period between 2000 and 2005”.

The median monthly income for part-timers is still the same at $500 compared to 10 years ago.

In view of the 118 per cent increase in part-timers for the last decade, more residents are working for an income of $500 that has not changed for 10 years.

Although ‘average incomes rose overall by 1.1 per cent a year’ (from 1998 to 2003), perhaps a more significant statistic is the median income, as this, at the 50th percentile, would reflect whether the bottom 50 per cent of the population are better or worse off.

The ‘% Change Per Annum – Average Monthly Household Income By Quintile, 1998 and 2003’, was -0.6 per cent and zero per cent respectively for the second and third quintile.

Does this mean that incomes did not increase for about 50 per cent of households? In this connection, the percentage share of households with no working persons increased from 4.5 per cent in 1998 to 7.4 per cent in 2003.

While the household income of those living in private homes grew, those in public flats fell by 0.4 per cent per annum, from $3,860 in 1998 to $3,790 in 2003. Since about 88 per cent of the population live in public flats, does this mean that the majority of Singaporeans were worse off?

In contrast, according to the HDB Household Survey, ‘average household income of HDB flat dwellers rose from $3,719 to $4,238 a month’.

How is it possible that the Department of Statistics Household Survey differs so markedly from the HDB Household Survey for apparently the same period, for such a crucial statistic?

I would like to point out that when different data for different time periods are made available, it may make any income data analysis, extremely difficult, and thus, harder to draw conclusions on whether and to what extent, what groups of Singaporeans are better or worse of, as a reflection of economic growth, wage growth and inflation.

Perhaps the increase in the number of pawnshops by almost 40 per cent over the last 5 years, and the increase in pawnshop loans from $1.26 billion in 2003, to $1.57 billion in 2006, may provide an alternative indication of how Singaporeans may be coping with the rising cost of living, vis-à-vis their income.


In the article “Govt taking steps to narrow income gap”, Minister Mentor Lee Kuan Yew spoke about the government’s plans to close the income gap.
(ST, Feb 2).

The following is a point-by-point rebuttal :-

“To help shrink the gap, Mr Lee listed various measures the Government had taken to raise the salaries of the lower-income, such as skills upgrading and job redesign.”

The wages of the bottom 30 per cent of workers have been declining since 2000
and the number of low-wage workers keep increasing. “Wage inequality in
Singapore is the highest by far compared with all OECD countries” (BT, Feb 2).

“Then we’re making up with Workfare and other supplements.”

106,000 lower-income self-employed have dropped out of Workfare after just 1 year.

“The Government’s home ownership policy, adding that newly-weds receive grants of up to $ 40,000 to $ 50,000 to start off, and HDB flats had risen in value over the years”

What’s the point of getting a $ 40,000 housing grant, when the price of a HDB flat increases by more than $ 40,000 ? And if you can’t pay, you lose your home, and maybe your CPF too. The HDB price index now, is still below it’s last high in 1996.

“We’re topping up by giving them subsidies for the conservancy, the power, water, many different ways where expenditure is necessary and cannot be avoided”

As charges keep going up, subsidies may not be keeping up with rising fees, especially when inflation has hit a 25-year high

“However, he is not in favour of subsidising transport “because then you will have unnecessary travel””

Subsidising travel is not free unlimited travel. So, how can there be “unnecessary travel” by lower-income people who are already finding it hard to make ends meet ?

“The biggest problem, as Mr Lee saw it, is getting people to understand they are in charge of their own medical problems, weight and diet”

How can people be “in charge of their own medical problems” ? No amount of healthy lifestyle can ensure no health problems. An example, is the Prime Minister who had cancer in his 40s.

“The state topped up Medisave accounts to help people meet medical costs.”

Small amounts of top-ups periodically that never seems to catch up with ever
increasing medical costs, with healthcare inflation hitting 6.3 per cent in December 2007.


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