Median income of residents dips for first time in 16 years

Those earning less would have fared worse if not for government payouts

Nominal median income for residents dipped by 0.6 per cent to $4,534 over the year to June, down from $4,563 last year. ST PHOTO: JASON QUAH

The incomes of Singapore residents took a hit not felt since 2004 because of the Covid-19 pandemic, according to advance estimates released by the Ministry of Manpower (MOM) yesterday.

The nominal median income of residents - Singaporeans and permanent residents - dipped by 0.6 per cent to $4,534 this year, down from $4,563 last year.

After taking inflation into account, real median income fell by 0.3 per cent, a reversal from the 2.2 per cent growth the previous year. The income data is for people in full-time employment and includes employer CPF contributions.

Those earning less were more badly affected.

Real income at the 20th percentile dropped by 4.5 per cent not including government payouts. MOM said this is due to industries more adversely affected by the pandemic having a high concentration of lower-income earners.

The incomes of lower-income self-employed workers such as taxi or private-hire car drivers and hawkers were also impacted by the plunge in tourist arrivals, work-from-home arrangements and suspension of dine-in services during the two-month circuit breaker period from April to June.

MOM noted that if government payouts to lower-income earners are factored in, such as the Workfare Income Supplement and the one-off Workfare Special Payment this year, the income level at the 20th percentile this year is similar to the level last year.

Over the five years from 2015 to this year, the income growth of full-timers at the 20th percentile (2.9 per cent per year) remained slightly higher than at the median (2.7 per cent per year).

A recent survey by human resources consultancy Mercer found that about a quarter of organisations here plan to introduce or continue with salary freezes, slightly lower than the 30 per cent that paused wage increments this year.

It also found that about 3 per cent of employers said they intend to implement pay cuts next year, compared with the 29 per cent which made salary reductions this year.

National Trades Union Congress assistant secretary-general Desmond Choo yesterday urged employers to continue to give the 13th month bonus this year. "To recognise the shared sacrifices their employees have made, NTUC strongly encourages firms to pay the annual wage supplement, particularly in view of the drop in median income," he said in a posting on Facebook.

In the latest monthly update on unemployment given by MOM yesterday, the overall rate and the rate for citizens remained unchanged in October, at 3.6 per cent and 4.9 per cent, respectively. The rate for residents rose to 4.8 per cent, up from 4.7 per cent in September. This indicates the pace of increase in unemployment rates has slowed.

Meanwhile, the overall employment rate for residents aged 15 and above fell to 64.5 per cent in June, the lowest since 2014 and down from 65.2 per cent a year earlier.

"This was a smaller decrease than in past recessions, helped by slower population and labour force growth," MOM noted in its report.

The annual report on the labour force is based on mid-year data. A separate report in October with preliminary data for the third quarter showed resident employment rebounded after the circuit breaker.

Yesterday, Manpower Minister Josephine Teo said the Covid-19 crisis had a greater impact on the employment of foreigners than on residents. Data on the foreign workforce is not captured in yesterday's report, which is why employment rates in it may not have fallen by as much as could be expected given the major recession, she said.

Tripartism played a big part in moderating the impact, she added. "Tripartite efforts helped to avoid the worst, and we have a reasonable footing upon which to strengthen the recovery."

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A version of this article appeared in the print edition of The Straits Times on December 04, 2020, with the headline Median income of residents dips for first time in 16 years. Subscribe