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Singapore real household income growth per person slows to 3% in 2018

SINGAPORE household income growth per person slowed in 2018, although the shrinking number of people living under the same roof helped to give the figures a boost.

Median household income from work for each member stood at S$2,792 a month - up by 3.4 per cent on a dollar basis, or by 3 per cent in real terms when shorn of inflation’s effects, according to Department of Statistics (SingStat) figures out on Wednesday.

This was down from the 3.9 per cent real growth in median per capita income the year before.

Altogether, households with at least one working member - which make up almost nine-tenths of all households here - saw real median employment income growth of 2.6 per cent, to S$9,293, in 2018, compared with 1.5 per cent growth in 2017.

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The median is the mid-way point in the population. The average (mean) real growth was 0.5 per cent for households, and 3 per cent when household size was taken into account.

Households in the top 11 to 30 per cent range (the 71st to 90th percentiles) saw the biggest income gains per household member, at 4 per cent, while households in the bottom 70 per cent saw average income growth of between 2.5 per cent and 3.4 per cent per member.

Growth was slower at both ends of the spectrum: Average income per household member grew by 2.7 per cent in the lowest 10th of the population and by 2.3 per cent in the top 10th.

Singapore’s average household incomes per member ranged from S$570 for the bottom 10th of the population to S$13,581 for the top 10th.

Household income from work includes Central Provident Funds from employers, but excludes income from other sources, such as dividends or rent. It also does not count maids’ wages.

Based on this definition of income per household member, the Gini co-efficient - a measure of income inequality - was 0.458 in 2018, just shy of 0.459 in the previous year.

Zero represents total income equality and one represents total inequality.

The Gini coefficient fell to 0.404 after taxes and transfers from the government, SingStat added, as public schemes handed out an average of S$4,494 to each resident household member.

Government transfers were S$9 lower, on average, than in the year before - on a drop in Medishield Life transitional subsidies and the absence of one-off grants such as NS50 vouchers.

About 12.1 per cent of households were made up entirely of people who are not working, which was mainly due to the rising share of ageing Singaporeans.

Aurobindo Ghosh, assistant professor of finance at the Singapore Management University's Lee Kong Chian School of Business, noted that there has been "a stable or slightly declining trend in inequality in Singapore, reflected in the Gini co-efficient both before and after government transfers and taxes".

"We can also see there has been growth across all deciles of the income distribution, albeit a slightly slower growth in the bottom 10th decile and the top 10th decile," he added.

Prof Ghosh described himself as cautiously optimistic on the outlook for wage growth in 2019, noting that nominal increases might have to hit 4 per cent for the year for the same level of real improvement, as inflation picks up.