Real median income in Singapore fell 4.5% in first half of 2023

SINGAPORE: Real median income in Singapore fell 4.5 per cent in the first half of 2023 compared with the first half of 2022.

The decline, based on preliminary estimates, was due to elevated inflation and a weaker economic outlook, Senior Minister of State for Manpower Zaqy Mohamad told parliament on Tuesday (Nov 7).

While the economic outlook remains uncertain, the government expects inflation to moderate for the rest of the year, he said.

Real median income indicates the income of a typical worker after taking inflation into account.

Nominal median income, which does not account for inflation, grew by 0.9 per cent over the same period.

In comparison, the five-year outlook from 2017 to 2022 showed that income growth outpaced inflation – real median income grew by about 9.4 per cent over that period, or 1.8 per cent a year.

Real wages grew by 0.4 per cent last year, with the pace of growth “significantly dampened” by inflation, said MOM in May.

Singapore’s core inflation rose to 5.5 per cent year-on-year in January, the highest since November 2008. It has since eased to 3 per cent in September.

Mr Zaqy was responding to questions from Members of Parliament (MPs) about real wage growth, and particularly about the impact of price increases on vulnerable workers.

Lower-wage workers have experienced good real income growth over the last five years, he said.

Real income at the 20th percentile rose 15.4 per cent from 2017 to 2022, or 2.9 per cent a year. This was faster than 1.8 per cent annual growth at the median.

“This means that as costs of living rose, the incomes of lower-wage workers rose even more, thereby narrowing the income gap between lower-wage workers and the median worker,” he said.

Mr Zaqy said that wage increments are expected to stay firm in travel-related sectors, where demand is recovering, and in more labour-intensive services sectors, where manpower shortages could be more persistent.