Budget: Real median income growth was 11 or 5.9%?

February 22, 2014

I refer to the Budget statement that was delivered in Parliament yesterday.

Incomes grew 11%?

It states that “Incomes have grown. Among citizens, median wages have increased by about 9% in real terms in the five years to 2013.”

Full-time workers including employer CPF with inputed CPI?

There is a footnote: “Median wages for Singaporeans increased by 12% from 2008 to 2013, when deflated by the CPI excluding imputed rentals on OOA. (This measure of the CPI excludes imputed rentals on owner-occupied accommodation, which has no impact on the cash expenditure of most households in Singapore.) The data on wages refers to that of full-time employed citizens (including employers CPF).”

All workers excluding employer CPF with CPI?

In this connection, according to the Ministry of Manpower’s (MOM) Labour Force in Singapore 2013 report, published on 29 January, 2014 – the Median Gross Monthly Income from work of employed residents (full-time and part-time) (excluding employer CPF) was $3,000, 2,800, 2,633, 2,500, 2,420 and $2,450, in 2008, 2009, 2010, 2011, 2012 and  2013, respectively.

22.4% nominal increase?

This works out to a nominal annual increase of 7.1, 6.3, 5.3, 3.3 and -1.2%, for the years 2013 – 2008, respectively.

In other words, nominal income growth in the last 5 years was only about 22.4%.

Since inflation was 2.4, 4.6, 5.2, 2.8 and 0,6%, for 2013, 2012, 2011, 2010 and 2009, respectively – or about 16.5% in the last 5 years (2008 CPI 99.4 to 2013 CPI 115.8) – the real increase in income was 4.7, 1.7, 0.1, 0.5 and -1.8%, for the same years 2013 – 2008, respectively.

(Note: I understand that the MOM statistics are for June and the DOS inflation statistics are for the whole year. Thus the above, is at best just a layman’s calculation estimates, as I do not have access to the end June inflation data)

Only 5.9% real increase?

So, does it mean  that the real income increase for the last 5 years was about 5.9% or about 1.15% per annum?

11 or 5.9% increase last 5 years?

So, which would be arguably a more appropriate statement on real income growth in the last 5 years – 11% or as I have analysed above – 5.9%?

By the way, if you check back on the past Budget statements, they seem to have changed from all workers (excluding employer CPF) to full-time workers (including employer CPF), and now using the inputed CPI instead of the CPI.

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.