More focus needed on individual, not just household income

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

How much did incomes rise last year?

According to government data released this month, the median monthly income of households with at least one working member rose just over 4 per cent after inflation to $8,290, from 2013 to last year.

On a per capita basis, income was $2,380.

Another set of government data showed that median income of full-time employed citizens rose by less - 1.4 per cent to $3,566.

One thing to note is that the two sets of data aren't directly comparable: household data is for resident households, which include those headed by citizens and permanent residents (PR), whereas data for individual workers is for citizens.

Why might resident household incomes rise faster than those of individual citizen workers? One reason is that the typical PR may earn more than the typical citizen.

Another reason households earned more is that more people in them are working.

The average number of working persons per household was 1.98 last year, up from 1.95 the year before. The difference looks marginal, but it is a 1.5 per cent increase in the number of workers.

One could thus argue that household income growth was partly fuelled by the rise in the number of people working.

Admittedly, this inference is far from certain. For instance, in the bottom 30 per cent of households, there were slightly fewer working persons on average last year, compared to 2012 - yet incomes were higher last year.

None of this is to say that household income figures should be ignored in favour of data on individual worker income.

If the concern is families' ability to support themselves, then household income figures are relevant. The fact that more people are working - and hence boosting household incomes - might then be a good sign, instead of something to be discounted.

But if the concern is whether workers' actual wages are rising, then data on individual workers' earnings is more relevant.

Here, there is a good measure of such data: the Manpower Ministry's annual wage change figures, which measure actual private-sector pay rises for full-time Singaporean and PR workers. But we will have to wait till June to see those figures for last year.

It's important to look at both resident and citizen data to get a clear picture of income trends.

It's also important to look at both household and individual income trends.

Going beyond the median figures would also help. A median household income of $8,290 means that half of households earned less than that, and the other half, more.

For a more fine-grained picture, there are figures for each decile: the bottom 10 per cent, the next 10 per cent, and so on.

Household income by decile is indeed, publicly available in the Department of Statistics report.

But the Government does not regularly release income data by decile for individual workers.

Doing so could improve the picture we have of Singapore's income trends.


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