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How Much Is Our GDP Per Person And How Much Does The Average Person In Singapore Really Get (2015)

GDP per capita in Singapore is high, but are our wages keeping up with our country’s growth?

 

Global Finance Magazine has published in March 2016 that Singapore has once again claimed the third spot as the world’s richest country. This wealth is measured using the Gross Domestic Product (GDP) per capita. Simply put, it sums up the total value of all products and services produced in a country for the year – to obtain the annual GDP – before dividing it by the country’s population.

So how much should the “average” Singapore be making knowing that we are the third richest nation in the world?

Our GDP per capita in 2015 is $72,711

At end-2015, Singapore’s GDP was recorded at $402.5 billion with a population size of 5.54 million (Singapore residents and foreigners)

Table 1: National Accounts and Population in Singapore

FY2013

FY2014

FY2015

Nominal GDP (millions)

$375,751

$388,169

$402,458

Total Population (millions)

5.399

5.470

5.535

GDP per capita

$69,594

$70,967

$72,711

GDP per capital per month

$5,800

$5,914

$6,059

Source: Singapore Department of Statistics

43.7% of nominal GDP was Compensation of Employees

Although $402.5 billion worth of products and services was created, not the entire amount was paid out as salaries. About 43.7%, or $174.5 billion, was paid out as wages.

Unlike GDP per capita, dividing total salary by the entire population is not a good gauge, as children, students and retirees are not working, and hence should be excluded from the calculation.

Using the total labour force is also inaccurate as it also includes those who are actively searching for a job. Therefore, we decided to use the total employed persons to find out what is the average wage of a Singaporean.

Table 2: Compensation of Employees and Employed Persons in Singapore

FY2013

FY2014

FY2015

Compensation of Employees (millions)

$154,903

$165,589

$174,543

Total Population (millions)

5.399

5.470

5.535

Total Labour Force (millions)

3.444

3.531

3.611

Total Employed Persons (millions)

3.353

3.440

3.516

Compensation per Employed Person

$46,200

$48,133

$49,642

Source: Singapore Department of Statistics, Ministry of Manpower

The average wage per employed person is $3,536

With annual compensation per employed person in FY2015 being $49,642, the average monthly compensation should be $4,137. After taking into consideration employers CPF contribution, the gross average monthly wage should be at about $3,536 ($4,137/1.17).

GDP Per Employed Person

At $3,536 a month ($4,137 after CPF), the average wage per employed person appears reasonable compared to our GDP per capita per month ($6,059), But let us also remember that GDP per capita included people who were economically unproductive, such as children and retirees.

FY2015

Nominal GDP (millions)

$402,458

Total Population (millions)

5.535

Total Labour Force (millions)

3.611

GDP per employed person

$114,453

GDP per employed person per month

$9,287

 

The figure of $9,287 simply shows the amount of output (measured in monetary value) that the “average” worker in Singapore creates. The natural tendency will be to compare this figure of $9,287 against the “average” wage of $4,137 (after CPF).

Of course, these two numbers will never ever be equal. Companies will retain a good portion of the GDP as profits. They will also need to pay tax on the profits that they made, which in turn would be used by the government to build up and maintain the infrastructure of the country.

Unlike what was portrayed about Singapore being the third richest country in the world, the average employee is not compensated near what we thought we would be – living a worry-free life without consistent monetary pressure.

That being said, whining and complaining would not improve our current situation. Therefore, we should use resources available to us to ensure that we remain competitive and continuously seek ways on how to improve our worth. For starters, we can make use of the SkillsFuture credits provided by our government.

Read Also: 5 Useful Finance Related Courses To Enroll Using SkillsFuture Credit

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