Median Monthly Income Goes Up

A survey by the Ministry of Manpower finds that the median monthly income of full time resident workers have risen by 4.2% to $2,710 this year. This is compared to $2,600 for the previous year.

The data for median gross monthly income for the full-time employed (less full-time national servicemen) are as follows:

2006: $2,170

2007: $2,330

2008: $2,590

2009: $2,600

2010: $2,710

CIMB-GK regional economist Song Seng Wun noted that real wage growth was "just barely keeping pace with inflation".

Median Income to Rise by 2020

I haven't had much to write about in the couple of days. Today, when I turned to the front page of the newspapers, I saw the headlines that states that average Singaporeans can expect their incomes to rise from the current median income of $2400 per month to $3,100 per month.

The funny thing about how I read news articles is not on what they report but rather on certain aspects that probably interests noone else but me. In reading this news article, I was more interested in why the goal was to raise the median income instead of the average/mean income. The 2nd thought that formed in my head was this: Will an average Singaporean earn more or less than the median income of $3,100 per month?

The difference between median and mean

This is probably secondary school maths but I guess there is a slight difference between median and mean (or average) when used in statistics. Generally, it depends on the data set and whether the mean or the median gives you the more accurate representation of what "average" really means.

When data is symmetrically distributed, the mean is a good way of calculating the average income. The mean is simple obtained by adding all incomes together divided by the total population. However, when data is skewed either to the left or the right, it might be better to use the median income to give a more accurate reflection of what "average" is in Singapore. So the question that is left to be answered is whether the income distribution curve is skewed to the left or the right. (Of course, to measure income that is not symmetrical, the median is a much better way that the mean).

So there is the tricky part if you say that the "average Singaporean can expect his income to rise because the median income is expected to rise." Here, what it means is that median income actually represents the "average" Singaporean's income more truthfully.

So I basically answered my two thoughts in this posting.

1. To measure income which is often not symmetrically distributed, we use median income which reflects the average income much better.

2. An average Singaporean can expect to earn the median income of $3,100 in ten years time and not more or less.

Other questions that will probably go unanswered are these:

1. Is the mean income in Singapore higher or lower than the median income?
2. Which one is harder for the government to achieve? Increasing the mean income or the median income?