Workers aged 35 to 44, lower-income group bear brunt of Covid-19 pandemic as pay shrinks: Report

The incomes of more than half of people aged 35 to 44 plunged by more than 30 per cent, according to the report.
The incomes of more than half of people aged 35 to 44 plunged by more than 30 per cent, according to the report.ST PHOTO: CHONG JUN LIANG

Workers aged 35 to 44 have borne the brunt of the Covid-19 pandemic, with its dismal economic climate having taken a heavy toll on their salaries.

More than a quarter of these workers have seen their incomes decline in recent months. Among them, 56 per cent saw their incomes plunge by more than 30 per cent, according to a DBS Bank report.

These workers, who form the bulk of Singapore's workforce, enjoy fewer support measures compared with older workers, said DBS Group Research senior economist Irvin Seah, a team member behind the report.

At the same time, those aged 35 to 44 face higher competition from their younger peers and their relatively higher wages also make them susceptible to wage cuts, he added.

The DBS report was based on macroeconomic data and anonymised findings from 1.2 million retail customers aged 25 to 70 who use DBS as their main salary crediting bank, over the March to May period. Work permit holders were excluded from the analysis.

The report also found that lower-income workers - those who earn less than $3,000 per month - make up almost half of customers who have experienced a fall in salaries. Within this group, 51 per cent saw their incomes fall by more than half.

In May, a larger proportion of customers - 26 per cent - saw their incomes shrink by over 10 per cent, compared with 15 per cent of them in March.

Among them, about a third saw their incomes plunge by more than half.

Many people also do not have sufficient savings to tide them over as they experience a loss in earnings. In May, 64 per cent of workers who had experienced a significant fall in income had less than three months of emergency funds, and 27 per cent had less than a month of such funds.

In terms of sectors, the aviation sector saw the largest spike in workers whose incomes deteriorated, with 81 per cent of people employed in the sector experiencing lower incomes in May, up from 39 per cent in March.

During a media briefing yesterday, Mr Seah called the Covid-19 pandemic "a highly regressive event which could potentially widen the income gap in Singapore".

He said: "Its impact on the various income groups has been disparate and uneven, and as we have found, skew unfavourably towards lower-income earners."

Measures such as the Jobs Support Scheme have helped to mitigate job losses, he added, "but more targeted policy intervention may be required to provide calibrated assistance to those that are worst affected".

Despite the pandemic's adverse impact on incomes, one silver lining is that more retail investors sought to grow their wealth by buying stocks when the equity markets plunged in March.

They shifted significantly towards equities, and away from bonds and unit trusts, noted the report, which was jointly produced by DBS Group Research and DBS Financial Planning Group for the bank's new DBS NAV Financial Health Series of research reports.

A version of this article appeared in the print edition of The Straits Times on August 19, 2020, with the headline 'Workers aged 35 to 44, lower-income group bear brunt as pay shrinks: Report'. Subscribe