Many of us would have read the headlines in early February this year: Median monthly household income in Singapore above $10,000 in 2023 for second straight year, The Straits Times reports. CNA gets even more specific in their headlines: Median monthly household income rises to S$10,869 in 2023, a real increase of 2.8%. Its subheading states that “the median monthly household income from work per household member rose to S$3500 in 2023.”

These headlines prompted the incredulity of many citizens, expressing their disbelief at these numbers, as they do not feel that these numbers reflect their own lived experiences. This article explores the concepts of median income – both individual and household – and what they mean, as well as how we can look at these statistics to determine where we may stand in comparison to the rest of the Singaporean population.

HOW IS THE MEDIAN INCOME CALCULATED AND WHAT ARE THE IMPLICATIONS?
The statistic for household median income is calculated by lining up all Singaporean households’ incomes, in order of lowest to highest, and the median is obtained by looking at the income level that is exactly in the middle of this line-up. As compared to looking at the average household income, the median is said to be a better representation of the typical lived experience in Singapore as the data will not be skewed by outliers in the extremes.

What then are the implications of a high median household income? A household median income above $10,000 for a second straight year suggests a relatively high standard of living or a significant level of disposable income for many households in Singapore. This also suggests potential economic growth and stability that implies a sustained trend, which could be a result of factors like rising wages or increasing employment opportunities.

The metric of household median income can be useful in representing collective household finances, hence offering a better picture of the financial resources of households in Singapore¹.

It is imperative to understand how the median monthly income from work (be it individual or household) is calculated.
This statistic comprises three facets:
(1) The basic income received from employment and business, which includes overtime pay and/or allowances
(2) One-twelfth of annual bonuses
(3) Employer CPF contributions²

Simply put, let’s say a person earns $3,500 before deductions, and they earn an annual bonus of two months ($7,000). This bonus is to be divided by 12, obtaining approximately $583.33. The employer’s monthly CPF contribution of 17% would bump this number to approximately $4,777.50. With regard to the inclusion of employer’s CPF contributions, Singstat has noted that the “gross monthly income is used to represent an individual’s income as bonuses and employer CPF contributions form a part of compensation from work.” While it is true that bonuses and employer CPF contributions are indeed compensation from work, what many are not satisfied with regard to what comprises this calculation is how little in comparison one brings home as compared to this reported number. Barring deductions other than the 20% employee CPF deductions, this person would be bringing home a monthly disposable salary of $2,800.

WHAT THE MEDIAN INCOME MIGHT NOT ACCOUNT FOR
We might also note that a collective household median income does not account for household size. A high median income for a large household with multiple earners might not be reflective of the reality of a single-person household with the same income. Hence, finding the average size of a Singaporean household is useful in getting a sense of how much resources each member of the household is allocated. Thus, in 2023, we observe that the median monthly household income from work per household member seems to have increased as well, from S$3,287 in 2022 to S$3,500 in 2023. This is with reference to the average size of the resident household of 3.11 persons in 2023³.

Furthermore, the median monthly household income and income per household member show data in nominal terms, which means that they are not adjusted for inflation. This explains how this household income seems to grow 7.6% in nominal terms from the previous year, but only 2.8% in real terms, after adjusting for inflation⁴.

Available data from the 2020 census also showed that from the 1,372,559 households whose data were collected, approximately 70% of the households had either only 1 or 2 employed persons. It is not a stretch to imply that an employed household member who is part of that 70% can be said to be earning $5,434.50 and above on average – half of the median monthly household income. This statistic raises the question: why then might so many Singaporeans feel a disconnect between their lived realities and the fact that a significant percentage earn $5,000 and above?

A quick look at the headlines on Singapore’s inflation rate in 2023 would suggest that inflation remains stable but high. In 2023, it was reported that the headline inflation averaged 4.8% in 2023. In comparison, a steady level of 2% usually signals a healthy economy – but the rise in prices due to inflation can ultimately impact households negatively, especially if the rise in prices is not on par with the increase in wages. Earlier, it was mentioned that the real increase in household median income per household member was 2.8% from the previous year – compared to an increase in inflation rates by 4.7% from 2022⁵. What is even more surprising is that despite the rise in median monthly household income, as mentioned previously in both real and nominal terms, the Ministry’s Labour Force in Singapore Advance Release 2023 reports that real median income of an employed person actually fell by 2.3% – despite nominal income growing by 2.5%⁶. All these suggest that inflation is increasing at a rate that is faster than the increase in wages of our citizens. This raises concern in Singaporeans with regard to their ability to sustain in an economy where the cost of living is steadily rising.

The cracks may already be showing. In March 2023, it was reported in a survey by Rakuten Insight that rising inflation affected the ability of 73% of Singaporean respondents to pay for basic necessities including food, clothing and healthcare⁷; while 50% of respondents reported that they had difficulty paying their utility bills. If a society is only as successful as its weakest member, a high household median income is not necessarily a cause for celebration yet.

It is then important to look at other measures to determine how we are faring as a society. While frameworks to accurately capture how to determine poverty, income inequality or minimum standards of living are constantly being improved on, we can still use them to roughly gauge how we are faring as a society.

There are indefinite measures and statistics to compare against when exploring the disparity between the reported high median income with lived realities. One useful tool to look at would be the Minimum Income Standard (MIS), which is an estimate of the minimum amount of income needed to meet basic needs in Singapore. This measure is rather comprehensive as it compares not only the cost of a particular basket of goods (as per the Consumer Price Index that is used to measure inflation), but it also takes into account other things that make up what a typical Singaporean deem as a basic need. The MIS takes into account other intangibles like opportunities for education, employment, work-life balance, and access to healthcare, on top of just housing, food, and clothing. Based on MIS calculations, S$2,556 would be the gross wage earned by an individual in a dual-income household which would be a reasonable target for a living wage in Singapore (that’s S$2,990 inclusive of employer CPF contributions). Looking at the statistics on Singstat on the average monthly household income from work per household member, we see that a significant approximate of 40% of the population do not meet this minimum of $2,990. While a downfall of this measure would be that its calculations only cover specific household configurations that include any configuration of single or partnered parents with one to three children up to 25 years old, the combination of any of these permutations still makes up a huge percentage in the demographic of Singapore’s households.

MALAY ETHNIC POPULATION: WHERE DO WE STAND? HOW IMPORTANT IS IT TO KNOW WHERE WE STAND?
The burning question still stands: where does the Malay community fit in this data? According to the 2020 census of population that surveyed a total of 151,741 Malay households, about 76% of Malay households are earning less than the $10,000 median monthly household income from work. This is in comparison to the 57% of Indian households, and 59% of Chinese households that are earning less than $10,000 median monthly household income from work. Looking at this data, it seems like just another number that proves how the Malay community is lagging in comparison to the rest of the nation.

One can’t help but observe that there is an inevitable and unnecessary racialisation of data in a multiracial country like Singapore, which uses the CMIO model as a seemingly unproblematic categorisation to govern the population. Especially in an increasingly diverse society made up of more than just the three “main” races and a generalised “Others”, there is a need to rethink the way we look at everyday givens – such as statistics – in order to not further perpetuate and entrench stereotypes.

While statistics and data may be hard facts, a constant implicit iteration of how the Malay community may be ‘lagging’ may do more harm than good. In fact, according to findings by CNA and OnePeople.sg, almost half of respondents felt like it was class and income inequality that would be the cause of social divide in Singapore⁸. Of course, we should not discount the intersection of class and race, but when we’ve spent close to 65 years looking at things through a racialised lens, it may be the only lens we can see through.

Ethnic-based self-help groups are a result of this categorisation of the Singaporean society. These groups that are funded by the Singapore government are regarded as still relevant to Singapore’s increasingly diverse multiracial society because they are able to “provide additional support and address issues without raising racial or religious sensitivities”. These are said to act as supplements to the government’s assistance to low-income families, regardless of race. A 2021 study by AMP Singapore has noted that the number of families needing assistance has increased over the years, with many deriving from the middle-income group⁹. The issues that they face are multifaceted – facing a combination of financial difficulties, underperformance of their children in school, juvenile delinquency, and substance abuse, among a few. However, a possible danger of continuing this “self-help” solution or looking at these problems inwardly based on racial lines is that we might run the risk of “individualising” the issue – implying that social mobility is one that can and should only be solved by the Malay community.

Here are some takeaways with regard to the median income data in relation to the Malay community. Firstly, we should be critical in understanding what the data accounts for – what is included, and more importantly what it does not consider. As expounded above, these may include high inflation rates, as well as the persistence of high income inequality between segments of the population. Additionally, while the positive data reflected in the median household income in Singapore may be a number that reflects a typical Singaporean household, we must also not disregard those that are at the bottom rungs of society. Thirdly, we should question the necessity to view certain statistics via a racialised lens. While it may be natural for us to know where we stand, the question remains on how we can do so in a way that is constructive and does not perpetuate racial differences.

¹ Singapore Department of Statistics. (2024). Resident Households By Age Group Of Household Reference Person And Household Living Arrangement. Tablebuilder.singstat.gov.sg. https://tablebuilder.singstat.gov.sg/table/TS/M810651
² Singapore Department of Statistics. (2024). Why Does The Reported Median Household Income Differ From My Personal Experience?
³ Average Household Size of Resident Households. Department of Statistics Singapore. (2023). https://www.singstat.gov.sg/find-data/search-by-theme/households/households/latest-data
⁴ Key Household Income Trends, 2023. (n.d.). Singapore Department of Statistics. Retrieved from https://www.singstat.gov.sg/-/media/files/news/press07022024.ashx.
⁵ Rodrigues, E. (2023). [Updated] inflation rate in singapore and how to protect yourself against rising inflation. Yahoo!Finance. Retrieved from https://sg.finance.yahoo.com/news/updated-inflation-rate-singapore-protect-051807145.html.
⁶ Labour Force in Singapore Advance Release 2023. (2023). Singapore Department of Statistics. Retrieved from https://stats.mom.gov.sg/iMAS_PdfLibrary/mrsd-labour-force-in-singapore-advance-release-2023.pdf.
⁷ Singapore: Inflation Effect on Household Expenditure 2023. Statista. (2023). https://www.statista.com/statistics/1380285/singapore-inflation-effect-on-household-expenditure/
⁸ Low, M., & Paulo, D. (2018, October 1). Class – not race nor religion – is potentially Singapore’s most divisive fault line. Channel News Asia. Retrieved from https://www.channelnewsasia.com/cnainsider/regardless-class-race-religion-survey-singapore-income-divide-760506.
⁹ Social Panel: Strategy and Recommendations at a Glance. Association of Muslim Professionals. (2010). http://amp.org.sg/wp-content/uploads/2021/11/7-Section-4_Social.pdf

Nur Izzatie is currently a Research Analyst at the Centre of Research on Islamic and Malay Affairs (RIMA). She completed her undergraduate studies in Sociology at Nanyang Technological University, where she was able to cultivate her love for unpacking and diving deep into different cultural phenomena.