Real wage growth p.a. in 1990s was 16 times more than last 12 years?

March 5, 2013

Bottom 20% wages fell 10% from 1997 to 2000?

I saw a facebook posting by Dr Ang Yong Guan which said “Mr Yeoh Lam Keong, the Economic Society of Singapore (ESS) vice-president who was a senior economist and strategist at the Government of Singapore Investment Corporation for 26 years, was one of the six panelists at a seminar yesterday at Orchard Hotel. He used statistics to show how the wages of Singapore’s bottom 20 per cent had fallen by about 10 per cent in real terms from 1997 to 2010, while incomes for the top 20 per cent had grown by about 30 per cent. “Excessive import of unskilled foreign labour has dampened and suppressed the real wages of the working class in Singapore,” he said.””

The above aroused my curiousity and so I decided to do some research on wage growth in the 1990s versus the last decade or so.

Median wage in 1990, 2000 versus 2012?

According to the book, Social Policy in Post-Industrial Singapore (edited by Lian Kwen Fee and Tong Chee Kiong, 2008), “the median wage (was) $400, $1,094 and $2,234 for 1980, 1990 and 2000 respectively (Department of Statistics, Singapore 2000) (page 186).

The book, The Binding Tie: Chinese Intergenerational Relations in Modern Singapore by Kristina Göransson, also said “In 2000, the median monthly income was estimated to be $2,234 (Census of Population 2000) (page 169).

Median wage grew 104% in 1990s versus only 34% last 12 years?

Since the median wage excluding employer CPF contribution in 2012 is $3,000, does it mean that the nominal median wage growth was about 34 ($3,000 divided by $2,234) and 104 per cent ($2,234 divided by $1,094), from 2000 to 2012 and 1990 to 2000, respectively?

Real growth 85% in 1990s versus 5% last 12 years?

With the Consumer Price Index (CPI) at 59.2, 73.8, 87.6 and 113.1, for 1980, 1990, 2000 and 2012, respectively, does it mean that inflation was about 29.1 and 18.7 per cent, from 2000 to 2012 and 1990 to 2000, respectively?

From the above figures, I estimate that the real median wage growth was about 5 per cent from 2000 to 2012.

Similarly, I estimate the real median wage growth was about 85 per cent from 1990 to 2000.

Real growth 6.4% p.a. in 1990s versus 0.4% last 12 years?

So, the estimated real median wage growth per annum was about 0.4 and 6.4 per cent, from 2000 to 2012 and 1990 to 2000, respectively.

If the above figures are correct, why is it that the real median wage growth in the 1990s, at about 6.4 per cent per annum, was so much higher than the estimated 0.4 per cent annum in the last 12 years or so?

1990s growth 16 times more than last 12 years?

If we divide 6.4 by 0.4, the result is about 16. So, does it mean that the real wage growth per annum in the 1990s was about 16 times more than the last 12 years or so?

Impact of foreign labour policies?

To what extent has our liberal foreign labour policies contributed to this very substantial decline in real median wage growth?

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.