Tough trying to figure out real income growth?

October 28, 2012

I refer to the article “Ex-manager earns $7,000 a month as cabby” (Sunday Times, Oct 28).

It struck me that there seems to be quite a lot of media stories recently about Singaporeans’ earnings.

Median income

So, I thought I would do some research on what the average Singaporean’s earnings are – the median income as of June 2011 was $2,925 (excluding employer CPF).

If you google “Singapore median salary”, the first link that you will find is the Ministry of Manpower’s (MOM) “Income – Gross Monthly Income from work” page.

MOM’s real median income?

It says that the real median income excluding employer CPF contribution grew by 2,6, 1.3, – 0.1 and 4 per cent, in 2011, 2010, 2009 and 2008, respectively.

However, the Notes say that “^ Deflated by Consumer Price Index at 2009 prices (2009 = 100). Figures in brackets are deflated by Consumer Price Index less imputed rentals on owner-occupied accommodation at 2009 prices (2009 = 100)” and that the “Data are for mid-year”.

‘Real’ real median income?

If you use the Consumer Price Index (CPI), instead of “CPI less imputed rentals on owner-occupied accommodation” and the data for year end, i.e. for the full year, instead of “Data are for mid-year”, real median income grew by – 0.6 (“MOM’s reply ‘Rate differs due to CPF contribution’”, Today, Apr 5 to my letter “Why the difference in income growth rate?”), 0.5 (“MOM report- Estimated 500,000 earn less than $1,200 or are unemployed”, TOC, Feb 2, 2011), – 3.2 and – 1.2 per cent (“…And why this hike isn’t”, Straits Times, Jul 15, 2011), respectively.

What a world of difference?

So, you can see from the above, that the two sets of real median income data are very different – three out of four years of positive growth versus three out of four years of negative growth.

0.7% growth last decade?

I estimate that the real median income increase per annum (including employer CPF contribution), over the last decade (2001 to 2011) for all workers (full-time and part-time) was only about 0.7 per cent, instead of the 1.1 per cent for full-time workers only (“Jobs in Singapore – Some interesting data from Labour Force 2011 Report”, TOC, Feb 8, 2012).

So, isn’t it kind of tough trying to figure out what was the real median income growth in Singapore?

Leong Sze Hian

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About the Author

Leong
Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.