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SOURCE: Asiabiz Services Pte Ltd
An increase in median household income is indicative of the economic health of middle-class households, says Singapore visa consultancy AsiaBiz Services.
Singapore (PRWEB) February 21, 2013
According to the Singapore Department of Statistics' "Key Household Income Trends 2012" report, Singapore’s median household income from work increased moderately in 2012.
Among resident employed households, the median monthly income rose from S$7,040 in 2011 to S$7,570 last year, registering a 7.5% increase in nominal terms, or 2.7% in real terms (i.e. after accounting for inflation).
Meanwhile, the average income per household member increased from S$1,994 in 2011 to S$2,127 in 2012. Adjusting for changes in household size, the median household income from work per household member registered an annual growth of 6.7% in nominal terms, or 1.9% in real terms.
Resident households pertain to households headed by Singapore citizens and permanent residents with at least one member working.
Cumulative data from 2007 to 2012 indicates that the median household income from work of resident employed households increased by 16% in real terms. Similarly, per household member, the median income grew by 13% in real terms over the same period.
In general, although income growth for different income groups varied from year to year, the data from the last five years pointed to a significant increase across the board. Further, resident employed households in the first to 60th percentiles experienced the strongest real growth for the latest 5-year period (2007 to 2012), compared to the preceding 5-year period (2002 to 2007).
The income disparity between low income groups and high income groups likewise increased. The Gini coefficient, a summary indicator of income inequality, rose moderately from 0.473 in 2011 to 0.478 in 2012. However, taking into account government transfers and taxes, the Gini coefficient was lower at 0.459 in in 2012, indicating that government schemes have a redistributive effect in income equality.
Those in smaller 1 to 2-room HDB flats, for example, received an annual average of $6,140 in government transfers per household member, while those in HDB 3-room flats received $1,530 per member on average. Overall, resident households, including households with no working individuals, received a median of $1,340 per member from various government assistance programs in 2012.
Commenting on the report, Mr James Nuben, Head of Taxation at Singapore work pass consultancy AsiaBiz Services, said, “An increase in median household income is a significant indicator of the economic health of middle-class households. Higher wage increments ensure that individuals retain their spending power amid inflationary pressures.”
“That said, the restructuring of the Singapore work visa framework is expected to further drive up domestic wages. Cheap foreign labor is no longer easily accessible, and employers have to deal with an increasingly tight labor market. These challenges, plus other factors, will contribute to wage inflation,” he continued.
“Furthermore, it is good to note that low to mid-income households are benefiting from the various government transfers available to residents. In a country that has repeatedly rejected a minimum wage structure, this is particularly significant. Although substantial income disparity still prevails, access to government assistance programs helps residents cope with the rising cost of living, and in the process, the income gap is narrowed to a certain extent,” he added.
ABOUT ASIABIZ SERVICES
Asiabiz Services is a Singapore-based consultancy that offers business solutions for both local and foreign professionals, investors and entrepreneurs. Our areas of expertise include Singapore company formation, offshore company setup, accounting, taxation and other related corporate services. Asiabiz Services also provides Singapore work visa and immigration services for foreign professionals wishing to relocate to Singapore.
120 Telok Ayer Street, Singapore 068589
Phone: +65 6303 4614
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