Economic inequality must be tackled decisively
The Association of Women for Action and Research (Aware) welcomes the publication of data on household income in the newly released report by the Department of Statistics Singapore (SingStat). Detailed information enables the public to better take part in important conversations about national policies.
The news coverage of the report raises some questions about inequality which bear closer consideration.
First, the reported trends in “household income”, such as real growth in median household income, reflect only “resident households with at least one working person” because the data was analysing income from work.
However, resident households comprised solely of non-working persons aged 60 years and above have formed an increasing proportion of households over the last decade, reaching 11.8 per cent in 2017. If this group was included, a much higher degree of income inequality would show.
Similarly, if capital income such as rent, interests, and dividends from accumulated wealth were considered, inequality would have been higher.
Second, richer households are seeing greater income growth than poorer ones. If the top 10 per cent is excluded, the trend is clear across the decile groups. Growth was lowest for the bottom decile group (2.1 per cent), rising fairly steadily through the higher decile groups, and peaking for the 81st to 90th percentiles (4.5 per cent).
Third, it would be useful to have more detail on government transfers to households. Not all households successfully apply for financial schemes for which they theoretically qualify. SingStat could improve the quality of public understanding by going beyond a list of schemes, to give figures for transfers made and expected transfers based on qualifying criteria, both disaggregated by specific schemes, across different recipient household types and household income levels.
Fourth, the figures include only resident households, excluding domestic workers. As there are many non-resident workers in Singapore, including both very high and very low wage-earners, looking at resident household income alone may give quite an incomplete understanding of overall wage structures.
How our society responds to inequality particularly affects women. Women are highly represented in certain lower-paying positions — forming, for instance, 59 per cent of cleaners, labourers and related workers.
Women are also under-represented in organisational leadership, and likely to be paid less even when they are in such positions. Barely 10 per cent of corporate directors are women and they are paid a staggering 43 per cent less than their male counterparts.
It is likely this kind of occupational segregation that caused Singapore to fare poorly on measures of gender equality in income and thus drop 10 places in the World Economic Forum’s annual Global Gender Gap rankings last year.
Low-income women may also be limited to ad-hoc, home-based and informal paid work due to caregiving responsibilities. Provisions for long-term financial security which rely primarily on private earnings,such as CPF savings, cannot adequately serve their needs.
Inequality must be a cause of concern for any society. In addition to raising fundamental questions of fairness, rising inequality can jeopardise the sustainability and functioning of the economy and stoke social division.
For this year’s Budget, we hope that the Government can put a commitment to promoting equality firmly on the national agenda.
ABOUT THE AUTHOR:
Jolene Tan is the Head of Advocacy & Research of the Association of Women for Action and Research
