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MOM report: Singapore’s median income drops 2.2% in real terms in 2023

In 2023, Singapore experienced a 2.2% drop in real median income, driven by a slowdown in nominal income growth, as revealed in the MOM’s annual Labour Force report released on Wednesday.

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SINGAPORE: In 2023, Singapore witnessed a 2.2% decline in median income in real terms, primarily attributed to a deceleration in nominal income growth, as indicated by the Ministry of Manpower’s (MOM) annual Labour Force in Singapore report released on Wednesday (31 January).

For full-time employed residents, the median gross monthly income increased by 2.5% year on year (yoy) to S$5,197, up from S$5,070 in 2022.

However, this growth was lower than the annualized average rate of increase of 3.4% observed from 2013 to 2023.

Income at the 20th percentile amounted to S$2,826, reflecting slower nominal growth of 1.7%, compared to the 4.1% per annum recorded from 2013 to 2023.

In real terms, the income at the 20th percentile declined by 3% yoy, or 2% after accounting for the Workfare Income Supplement and other related payments.

The MOM highlighted that the decline in real incomes in 2023 had dampened overall gains over the past five years.

From 2018 to 2023, real incomes rose by 0.5% per annum at the median and 1.1% per annum at the 20th percentile, significantly slower than the preceding five years when real incomes rose by 3.5% per annum at the median and 4.2% per annum at the 20th percentile.

Despite this, the MOM noted a continuous narrowing of the gap between incomes at the median and the 20th percentile over the last decade, with real income growth at the bottom outpacing that of the median.

MOM said this is due to measures to uplift lower-wage workers.

For full-time employed degree holders, the median income remained unchanged at S$8,190 in 2023.

However, it declined by 0.8% per annum in real terms from 2018 to 2023, attributed to higher inflation and the impact of the Covid-19 recession.

Over the last decade, median incomes for these workers still grew by 0.9% per annum in real terms.

Employment rate dropped to 66.2% in 2023

As the labour market cooled from the “exceptionally tight” conditions in 2022, the employment rate for residents aged 15 and over dropped to 66.2% in 2023 from a record high of 67.5% in 2022.

This decline was due to lower labour force participation, with more residents staying out of the labour force, than difficulties in seeking employment, according to the MOM.

However, MOM defended that Singapore has the fourth highest employment rate when compared to countries in the Organisation for Economic Co-operation and Development (OECD).

“As a result of policies aimed at encouraging women to return to the workforce6 and improving the employability of older workers, Singapore has consistently maintained its high ranking over the decade despite an ageing workforce, ” said MOM.

The report also noted that the Unemployment rates improved for both PMETs and non-PMETs. mNonPMETs saw a larger decline in the unemployment rate from 4.4% in 2022 to 3.6% in 2023, compared to PMETs (from 2.6% to 2.4%).

Similarly, non-PMETs also experienced a bigger decline in their long-term unemployment rate from 0.7% to 0.5% compared to PMETs (0.5% to 0.4%).

MOM said Unemployment among non-PMETs will likely stay low, as the recovery in inbound tourism gives support to the hiring of non-PMETs, particularly in sectors such as Food & Beverage Services and Retail Trade.

“Among PMETs, most age groups experienced a decline in unemployment rates, except for those in their 40s. The higher unemployment rate for those in their 40s was due to more leaving their previous jobs due to work conditions.”

MOM said for PMETs in their 40s, the rise in unemployment rates came from professionals, as well as associate professionals & technicians.

However, their unemployment is likely to be frictional, as their long-term unemployment rate remained low.

Across age groups, unemployment rates among non-PMETs fell and their long-term unemployment rates also remained stable and low, said MOM.

Private-hire car drivers, taxi drivers and delivery workers remained top occupations of  primary own account workers

The participation rate in the labour force, which reached its peak at 70.5% in 2021, has gradually eased to 68.6% in 2023, maintaining a level above pre-pandemic rates.

Additionally, the pandemic prompted a surge in primary own-account workers, notably in the private-hire car driver sector, which has become the predominant occupation since 2020, with a total count of 30,500 in 2023.

Among the top occupations in this category, taxi drivers (21,100) and delivery workers (13,300) have increasingly aligned themselves with digitally intermediated platforms.

Sales roles, such as real estate agents (16,500) and insurance sales agents/brokers (12,900), continued to constitute a significant proportion of resident regular primary own-account workers in 2023.

Seniors formed a larger and growing share of primary own account workers

Secondary own-account workers, those engaged in own-account work on the side, fell to 34,000 in 2023, comparable to pre-pandemic levels in 2019.

The report specifically highlights that own-account work provides increased flexibility, making it an appealing option for individuals seeking a gradual transition into retirement.

Consequently, a significant majority of regular primary own-account workers were residents aged 50 and over, comprising 54.1% in 2023.

Notably, there has been a rising trend in the share of individuals aged 60 and above, accounting for 27.5% in recent years.

Conversely, those below the age of 30 constituted a smaller proportion at 6.9% of the regular primary own-account workers.

MOM said looking forward, the increase in the overall labour force participation rate will be dampened by the effects of an ageing population as older residents, who tend to participate less in the labour force than those younger, form a rising share of the population.

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Singaporean median income only drops 2.2%??? It feels more like 220% when you factored in the ground inflation, increases in taxes like gst and property tax … etc. and all the living expenses.

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