Household income for 2009 falls across the board
By Claire Huang, Channel NewsAsia | Posted: 19 February 2010 2130 hrs

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SINGAPORE : Household income from work fell in real terms across all income groups in Singapore last year.

This is according to figures released by the Department of Statistics on 'Key Household Income Trends, 2009'.

Findings indicate that Singapore's bottom 10 per cent was the hardest hit.

2009 was a rough year for all. Each member of the poorest group of households got a monthly income of S$334, down from S$340 in 2008.

In real terms, the average income per household member among employed households fell by 3.5 per cent.

But things were not rosy for Singapore's top 10 per cent employed households as well.

Their average monthly income from work fell by 2.3 per cent.

Associate Professor Tan Khee Giap, Lee Kuan Yew School of Public Policy, said: "Those who got hit hard are not just the blue-collar (workers), but also the white-collar (workers). That is why you are also seeing white-collar (workers) having severe...pay cuts. 2009 was an unusual year, we should see (things) picking up over the next two years."

The fall across the various income groups is accounted for by the weak labour market conditions last year, which saw higher unemployment rates and lower wages. This also led to an increase in the number of persons not working in a household.

Meanwhile, the median monthly household income from work among all resident households dropped by 1.9 per cent - from S$4,950 in 2008 to 4,850 in 2009.

Higher consumer price inflation meant that resident households saw real income fall by 2.5 per cent, a far cry from the growth of 6.1 per cent in 2008.

Among resident households, those living in one- and two-room HDB flats saw the greatest fall of 13.9 per cent in median monthly household income.

Those living in bigger housing types saw a 2.3 per cent drop in real terms.

According to the paper, median household income from work fell 1.8 per cent for those living in four-room HDB flats.

But there is a silver lining. Government schemes like the Resilience Package helped narrow the rich-poor income gap.

A measurement of income inequality, also known as the Gini coefficient, was 0.453 in 2009, down slightly from 0.454 from the previous year.

Associate Professor Tan said: "The income gap as measured by the Gini coefficient since 2007 and 2008 has been narrowing. This is basically due to the government subsidies and rebates, including the Workfare (Income) Supplement Scheme..."

Lower income groups benefited the most. On average, the Resilience Package added S$2,460 per household member to resident households in one- and two-room HDB flats. Those in three-room flats got S$1,600. This was more than the S$930 per household member for households in private flats and landed properties.

Associate Professor Tan said: "We should look towards this coming Budget on Monday, where the lower income group will be addressed, and where the blue-collar workers, low-wage (workers), would have to be encouraged, by asking them to work longer and make up the difference for the low pay they are getting."

This may be possible, given the government's latest upward revision of the economic growth for this year. - CNA/ms