Posted by
theonlinecitizen
on February 13,
2008
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.
