I refer to the articles “Real median income growth slowed to 2.2% this year: MOM findings” (Today, Nov 30) and “Employment rate of Singapore residents grow“ (Straits Times, Nov 30).
The former states that “The median monthly income from work (including employer CPF contributions) of full-time employed residents rose by 7.1 per cent over the year to S$3,480 in 2012, down from the growth of 8.3 per cent in 2011.
Real income grew 2.2%?
Accounting for inflation using the Consumer Price Index (CPI) for all items, real median income growth moderated to 2.2 per cent in 2012 from 2.9 per cent in 2011.”
Real income (excluding employer CPF) minus 2.3%?
However, according to the “Singapore Workforce, 2012” report by the Research and Statistics Department of the Ministry of Manpower (MOM) released on 30 November, the median monthly income from work (excluding employer CPF contributions) of full-time employed residents rose by only 2.6 per cent over the year to S$3,000 in 2012, from $2,925 in 2011.
After accounting for inflation, the real median income growth was minus 2.3 per cent.
So, what a world of difference it makes between including and excluding employer CPF contributions?
This means that workers had a negative real income growth for the year so far.
Almost 5 years of negative real income growth?
So, when the full year’s data until 31 December 2012 is available (the subject report is until June 2012), it appears that we may likely have yet another year of negative real income growth, because workers’ real median wage growth was negative over the last 5 years or so (negative in 2011, 2009, 2008, + 0.5% in 2010).
10 years’ real income growth was 0
The real change in income (annualised per annum) for the last 10 years from 2002 to 2012, was 0 and 1.3 per cent, for workers at the 20th percentile and median (50th percentile), respectively.
This means that the lower-income had zero real increase in income for the last 10 years, and the median only increased by just 1.3 per cent per annum.
Actually, the cumulative real income growth for the 20th percentile for the last 10 years was only 0.4 per cent. So, by way of illustration, a low-income worker who earned $1,000 in 2002 only increased his or income to just $1,004 in 2012, a $4 increase after 10 years!
10 years’real income growth (excluding employer CPF contribution) negative?
I am unable to tell what the above figures are, excluding employer CPF contribution, as the table in the report only gives the computed statistics including employer CPF contribution.
I can only guess that there may have been negative real income growth for the 20th percentile in the last decade, if we exclude the employer CPF contribution.
It is interesting to note that the narrative in the report and media reports which only talk about income (including employer CPF contribution) is a recent phenomena in recent years, as in the past, the statistics did not have “including employer CPF contribution” as a subset in the statistics in the report.
Increase in discouraged unemployed
The pool of resident discouraged workers was small, though it increased after two consecutive years of decline. Some 9,600 or 0.5% of the resident labour force (inclusive of discouraged workers) were discouraged from seeking work in 2012, up from 8,600 or 0.4% in 2011.
Discouraged workers are persons outside the labour force who were not actively looking for a job because they believed their job search would not yield results.
Leong Sze Hian