Household incomes rise amid labour crunch
By Mok Fei Fei, The Straits Times, 17 Feb 2015
By Mok Fei Fei, The Straits Times, 17 Feb 2015
In households with at least one person working, the median monthly income from work rose to $8,290 last year, up from $7,870 in 2013.
That is a 5.3 per cent jump in nominal terms, or a 4.1 per cent rise in real terms once inflation is taken into account.
The increase was even more apparent when household size was accounted for, with the median monthly household income per member up by 5.9 per cent in nominal terms and 4.7 per cent in real terms.
The average monthly income for each member of a household in the top one-tenth income bracket jumped 6.7 per cent in real terms.
Incomes in the bottom tenth of households rose 5.1 per cent, according to the Department of Statistics' annual Key Household Income Trends (2014) survey.
Only income from employment and business was used. Interests, dividends and rents were not included.
Economists said the continued tight labour market, coupled with economic growth and lower inflation, all played a part.
"Top income earners traditionally have skill sets that are more marketable and, when you have a labour crunch, you can expect them to see relatively higher wage increases," said DBS economist Irvin Seah.
Barclays economist Leong Wai Ho noted that most of the disinflation last year was due to lower oil prices, which probably benefited top earners more as they are more likely to drive.
Income inequality crept up: The Gini coefficient rose to 0.464 from 0.463 in 2013. A lower Gini coefficient implies a more equal distribution of incomes.
If government transfers and taxes are included, the Gini coefficient last year was 0.412, up from 0.409 in 2013. Last year's figure was the second- lowest on record since it was first calculated in 2000, with the 2013 figure being the lowest.
The higher payouts in 2013 stemmed from one-off transfers such as Medisave top-ups and property tax rebates.
However, people living in one- and two-room HDB flats had more transfers last year than in 2013, receiving $9,026 per member as opposed to $8,839 in the previous year.
OCBC economist Selena Ling said the inclusive growth theme could continue in this year's Budget, with more aid for those in the lower and sandwiched classes.