EYE ON SINGAPORE

Make foreigners, PRs count in income data

This story was first published in The Straits Times on Feb 26, 2015

There has been some good news for workers here in recent weeks.

As Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam pointed out in his Budget speech on Monday, incomes have continued to rise, outpacing inflation, buoyed by a tight labour market and more jobs.

Recently released government data also bears this out. The Household Income Trends report made public last week shows that among resident employed households, median monthly household income from work has risen steadily from $6,006 in 2009 to $8,292 last year. That's an increase of 3.4 per cent per annum, even after adjusting for inflation.

Personal incomes are also growing, though at a slower pace.


Latest data shows that incomes have risen in Singapore in the last year. But a closer look reveals gaps in the data released. ST ILLUSTRATION: MIEL

Full-time employed Singapore citizens earned $3,566 last year. This is up from $2,748 five years earlier, according to the Ministry of Manpower's Employment Situation report released on Jan 30.

Real incomes of Singaporeans have grown faster than residents' between 2013 and 2014. Citizens' incomes have risen by 1.4 per cent; residents' incomes, by 0.7 per cent.

This could partly be due to measures in the past year to boost incomes of Singaporean workers in low-wage jobs, such as cleaners.

While all this is good news, it is worth noting that there remain significant gaps in national income data which should be plugged.

Citizen v PR income data

FIRST, there is a need to distinguish more sharply between citizens' incomes and those of permanent residents (PRs) - and both must be made public.

There appears to be no publicly available information right now on how much PRs earn. The latest Labour Force In Singapore report shows that median monthly incomes for full-time employed residents - that is citizens plus PRs - grew to $3,770 last year.

This is higher than the median income of full-time Singaporean workers, which is $3,566.

It is thus clear that PRs - who tend to be better educated than citizens - likely earned more than citizens. Lumping citizen and PR income data can paint too rosy a picture of a community's income trends. For example, there has been concern that the income data of ethnic Indian Singaporeans is being inflated by lumping them together with India-born immigrants who take up permanent residence or citizenship here.

In 2010, the average monthly household income from work in homes where the head of household was an Indian was $7,664, well above the national average of $7,214.

Significantly, a decade earlier, the incomes of Indian-headed households was $4,623 - below the national average income ($4,988) as well as that for the Chinese community ($5,258).

The influx in the 2000s of better-educated - and higher-income Indian nationals who took up PR here - was seen as a possible reason for the rise.

As Singapore citizens age and if fertility rates remain low, more and more younger PRs may flood the Singapore workforce.

Distinguishing between and separately tracking incomes and numbers of citizens and PRs will give a truer picture of Singaporean income trends.

In fact, labour force surveys should clearly distinguish between citizen and non-citizen workers in all aspects of employment, such as salaries and age profiles.

This way, the data can help shed light on the persistent complaint of some older Singaporeans that they are losing out to younger PRs in the workplace.

Make foreign workers count

THE second crucial gap in information on income trends is the size and impact of the foreign workforce in Singapore.

According to the latest MOM data, about 1.35 million of Singapore's 3.6 million-strong workforce - or around 37 per cent - is made up of foreigners. This includes foreign domestic workers, construction workers and others on various work passes.

But it does not include PRs.

Factor them in and non-citizens may well make up more than half the workforce. But we don't know for sure.

This approach differs sharply from Switzerland, which also has a high number of foreign workers.

It routinely makes public the numbers of foreigners and citizens in its workforce. Currently, one in four workers there is a foreigner. Unlike Singapore, Switzerland also routinely makes public the nationality of its permanent residents.

Significantly, despite the fact that the non-PR foreigners make up nearly 40 per cent of the Singapore workforce, they are not counted in median income or inequality calculations, which are based on resident workers. This, it must be noted, deviates from some developed countries' norm.

Spokesmen for the United States' Bureau of Labor Statistics and Statistics Canada told The Straits Times that in both countries, national median income and inequality calculations include data on both citizens and non-citizens. Both countries also make public a breakdown of the median incomes and employment data of immigrant and native workers.

This is although immigrants made up just 16 per cent of the workforce in the US in 2013, the latest year for which data is available. Nearly half were Hispanic and worked in lower-paid, blue-collar jobs as labourers or service staff.

The median weekly earnings of foreign-born, full-time wage and salary workers was US$643 (S$876) in 2013, compared with US$805 for their native-born counterparts.

Spotlight on foreign workers' salaries

FINALLY, there is no official data on the wages of blue-collar foreign workers, despite their vast and growing numbers and the important economic role they play in doing essential jobs that most locals won't deign to do.

There are more than 760,000 foreign work-permit holders who work in construction, shipping, manufacturing and other low-wage jobs. Another 218,000 foreigners work as domestic workers. Together, these workers make up nearly 30 per cent of the workforce. But their wages are not included in government wage surveys here, which consider only resident workers.

Significantly, the non-PR foreign workforce here has more than doubled in the past decade.

Anecdotally, work-permit holders here can earn as little as $18 a day - or around $400 a month before overtime. Their incomes may not have improved much in the past decade. In fact, they may well have fallen as companies try to recover costs of higher foreign worker levies by lowering worker pay. This needs to change.

As Singapore moves towards a more progressive, inclusive society, it is time to ensure that all workers - citizens, PRs and foreigners - earn a fair wage. That, of course, cannot be done without knowing how much each group earns in the first place.

radhab@sph.com.sg

This story was first published in The Straits Times on Feb 26, 2015