SINGAPORE: Singaporean households across all income groups earned more money last year, said the Department of Statistics (DOS).

In fact, its findings showed the average monthly household income rose by over 9 percent, the fastest rate of growth in 10 years. But the income gap between the rich and poor has also widened.

Singaporeans saw their wages go up in 2007 as a result of strong economic growth and a tight labour market.

The DOS said that average monthly income among resident households rose 9.6 per cent to S$6,280 last year, compared to S$5,730 in 2006.

Meanwhile, the average monthly income among households with at least one employed person grew 9.1 per cent to S$6,830.

After factoring inflation, all groups experienced real income growth of at least 3 per cent. In addition, the proportion of households in the higher income brackets also increased.

The findings also showed a widening income gap between the top and bottom earners.

For instance, those earning over S$20,000 a month saw wages climb by about 10.5 per cent on average, while the bottom 20 per cent who earn under S$2,220 a month, had increments of between 3.9 and 5 per cent.

Central Singapore CDC is concerned the widening income gap may compound problems faced by lower-income families.

Zainudin Nordin, Mayor of Central Singapore CDC, said: "What we are seeing at the moment - even for households with a family member earning income - we notice that they are beginning to feel the strain from the rising cost of living.

"So one of the concerns is how do we keep workers in the job; we are working towards making them more skilful by providing them with more training and making them more employable."

The widening income gap is made worse by higher-income households experiencing faster income growth than lower-income ones.

DOS findings showed the distribution of income per household member widened to 0.485, up from 0.472 in the previous year, in the largest disparity since year 2000.

But the DOS said this gap is mitigated by government benefits which are weighted in favour of the needy.

After adjusting for government benefits and taxes, the Gini coefficient - a measure of income inequality - was 0.46 in 2007, which was lower than the year before.

Going forward, analysts say the household income this year may not grow as strongly as it did in 2007. This is due to concerns about a possible recession in the US economy, rising inflation, as well as uncertainties caused by the sub-prime crisis.

David Cohen, director for Asian economic forecasting at Action Economics!, said: "The world economy is unlikely to grow quite as strongly as it did in 2007, and Singapore will likely face some spillover from that.

"The inflationary pressure from higher oil prices and food prices going up in recent months as well... might pinch the budgets of households and of course the lower-income households would feel more than the rest."

One way to tackle this challenge is to ensure there is economic growth and that Singapore continues to attract investments. - CNA/ir