Sunday, November 30, 2014

Do You Earn More Than Singapore's Median Monthly Household Income?

A frequent topic of discussion amongst people in Singapore is whether their household income is more than the median household income.

The Department of Statistics in Singapore publishes a report that is titled "Key Household Income Trends" every year.  The latest report is dated 2013.

Some points to note first.  The paper only highlights income from work received by all working members of the household from employment and business.  This means that it does not include income from dividends, etc.

Some people often mistakenly assume that the figures are the median income of a worker employed in Singapore.  It is not.  It refers to the household income.

So here are the numbers:

  1.  Among resident employed households, median monthly household income increased from $7570 in 2012 to $7870 in 2013.  This represents a 4.0% growth in nominal terms, or 1.6% in real terms (where the Consumer Price Index) is used as a deflator to compute real income changes.
  2. Taking household size, median monthly household income from work per household member rose by 5.6 per cent in nominal terms, or 3.2 per cent in real terms.

I make three observations on the median monthly household income figures:

Firstly, we can see that the median household income amongst resident employed households is almost reaching $8,000.  However, we also note that resident employed households does not equal to the resident households in Singapore.  As many as 9.4% of the resident households in Singapore have no working persons with 6.1% of these considered as "Retiree" households.  That means that the data on the median monthly household income is only representative of 90.6% of the resident households in Singapore. Granted that some of these households might be really poor, 6.1% of these households probably have accumulated more assets/wealth/passive income compared to a household that is earning $7870.   


Secondly, the survey only relates to roughly 70% of the population in Singapore since the focus is only on households that are headed by Singaporeans and PRs (granted that some of the non-Singapore citizens or PRs might actually be under a household headed by a Singapore citizen or PR). This is because the analysis is only based on households headed by Singaporean and permanent resident (PR).  In 2014, the total Singapore population was 5.469 million.  The resident population (Singaporean and PR) was 3.87million.  This means that t

Thirdly, we should also take note that the source of data is from a sample of households surveyed in the June Comprehensive Labour Force Surveys conducted by the Ministry of Manpower. Based on what I googled, it appears that 30,000 households were surveyed.  So this is only a sample of survey results and might not indicate or depict the true picture of the state of affairs.

So if you think that having a household income of greater than $7870 puts you in the top 50% of the Singapore population, think again.

2 comments:

  1. There's truth in what you sai. But v often pple who earn a lot also tend to spend a lot. So sometimes a middle class frugal person can.accumulate same or more amount of wealth in a given.time.

    ReplyDelete
  2. Hi Paul,

    That is true. One should learn to live below their means.

    ReplyDelete

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