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Less Than 1% Real Growth In Wages For The Bottom 10 Percentile [Election Indicators]: No 3 Of 8

Salary growth all around looks good, especially if you are in top 25 percentile.


Wages has always been a sensitive topic for discussion everywhere in the world and Singapore is no exception. With healthy nominal GDP growths in 2012, 2013 and 2014 at 4.6%, 4.4% and 3.1% respectively, we should expect wages to increase in tandem as well.

The conclusions on wages are broken into 2 categories;

The Positive

– Median wage grew and outpaced the rate of inflation

– All Singaporeans managed positive real wage growth

The Negative

– The lower income group real wage grew slower than the higher income group, resulting in greater income inequality

Median wage grew and outpaced inflation

Exhibit 1: Median Wage of Singapore Residents

Exb 1
Note: Residents excludes Full-time NSmen, and consist of Singapore Citizens and PRs. Median wage consist of CPF contributions.
Source: Singapore Department of Statistics, Ministry of Manpower (Singapore)

If we placed the entire population of Singapore residents in a straight line and pick the person standing at the centre, that person right in the middle will be earning $3,770/month (inclusive of’ employers’ CPF contributions).

The gross wage of this person would be $3,222/month and the take-home pay is $2,578 (less 20% CPF contribution).

Singapore has done a great job in ensuring that wage increment managed to beat the pace of inflation providing us with real wage growths of at least 1.0% in the last 4 years.

Distribution of wealth through wages was unbalanced

Exhibit 2 and 3 below shows the total combined wage of all eligible workers in ONE household.

We have to commend the government for ensuring that all Singapore resident households managed to achieve positive real wage growths since the last general elections.

However, from Exhibit 2 and 3, we can also see that the real wage growth for the bottom 10 percentile has remained the same in both periods and weakened for the bottom 25 percentile. In comparison, the 75 percentile was able to see real wage growth increase to 3.0% for period 2011-2014 from 1.9% for the period 2007-2010.

With a higher household income base and higher real wage growth of the 75 percentile, income inequality has deteriorated. The worrying sign is that Singapore already has one of the worst Gini coefficients, a measure of income inequality, in the developed world.

Exhibit 2: Monthly Household Income of Singapore Residents (2007 & 2010)

Exh 2Note: Resident household refers to household headed a Singapore citizen or PR, the percentile has excluded retiree households. CAGR = Compound Annual Growth Rate

Source: Singapore Department of Statistics

Exhibit 3: Monthly Household Income of Singapore Residents (2011 & 2014)

Exh 3

Note: Resident household refers to household headed a Singapore citizen or PR, the percentile has excluded retiree households. CAGR = Compound Annual Growth Rate

Source: Singapore Department of Statistics

Your country, your vote, your choice.

Read Also: The consistent trend of our population growth: Election Indicators: No 1 of 8

Read Also: Our GDP Per Capita Growth: Election Indicators: No 2 of 8

This is the third article of a series of 8 articles that will discuss Singapore’s economic indicators to help voters make an informed decision in the upcoming election. DollarsAndSense.sg is neither affiliated with any political party nor a political website.

Original Photo From Benjamin Lim

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