SINGAPORE (Aug 5): Singapore’s overall average monthly household income has risen 2.4% since half a decade ago in 2012/13, whereas expenditure only went up 0.8%. But the bottom 20% of households in the city state might be feeling even poorer than before.
From 2012/13 to 2017/18, the bottom one-fifth of households was the only group whose rise in expenditure outpaced income growth in nominal terms. For these Singaporean and permanent resident households, their incomes rose 2.8% a year — the fastest growth among the quintiles — but their expenses were 3% higher a year.
By comparison, the top 20% of households saw their incomes rise 1.6% while expenses remained stable, dropping $2 from $7,575 in 2012/13 to $7,573 in the five years since. Other income groups’ income rose from 2.7% to 3.3%, while expenses increased from 0.4% to 1.2%.
These findings were from the latest edition of the Household Expenditure Survey released on July 31 by the Department of Statistics. The survey is conducted every five years.
That the top quintile saw stable household expenditure can be pegged to smaller household sizes within that income group, says the report. When looking at individual household member expenses per month, the top 20% are actually spending $242 more now.
Still, the fact that expenses in the lowest-income group outpaced their income deserves closer scrutiny. Assistant professor Ng Kok Hoe from the Lee Kuan Yew School of Public Policy says: “This should alert us that households do not have equal capacities to save and plan for the future.”
To be fair, the survey does not differentiate between employed and unemployed households, so this bottom 20% could include retirees with uncaptured and one-off income sources, such as proceeds from property sales, lump-sum Central Provident Fund (CPF) withdrawals and insurance claims.
Economist Walter Theseira from the Singapore University of Social Sciences says it is important to figure out if the rising expenses are due to increased consumption, or costs. “If you think about developing countries, a key goal is to raise consumption so people enjoy more — they can buy motor vehicles, handphones, eat out more and things like that.”
Theseira hopes future editions of this survey can deconstruct expenditure into consumption or cost of goods. “If I see someone spending more, is it because he’s buying the same amount but the price has gone up, or has he shifted this food mix to eating out?” he says.
Indeed, the report contains indications that lifestyles have changed. Households are eating out more, spending on average $810 a month in 2017/18 compared with $764 five years before, and $592 in 2007/08. They are also spending $10 more on taxis and private-hire car services, and more homes are outfitted with air conditioners, dryers and internet while fewer hold on to desktops and digital cameras.
Ng and National University of Singapore sociologist Tan Ern Ser say Singapore needs to pin down what it considers as basic needs to see if lower-income groups are attaining a minimum standard of living.
Tan says: “We need more information to arrive at a conclusion: What and how much constitutes basic needs and whether, as a society, we believe the poor or low-income deserve more than meeting basic needs.”
Currently, 55% of the bottom quintile’s household income comes from employment. More than a quarter comes from non-work sources including their children, relatives, or government transfers such as the Workfare Income Supplement, payouts from CPF and insurance policies. Tan adds: “I think we must decide what is a decent quality of life for all and use some of the reserves we save for rainy days to help achieve that.”
