More Government Support Contributes to Higher Household Incomes Amid Economic Challenges

Singapore’s median household employment income rose to $11,297 in 2024, marking an increase in the nation’s earnings and a reduction in income inequality, according to the latest figures from the Singapore Department of Statistics (SingStat). The report, released on February 13, reveals that the nation’s households saw a rise in government assistance through various schemes, contributing to improved financial outcomes across different income groups.

The data showed that median monthly household employment income for resident employed households grew by 3.9% in nominal terms, up from $10,869 in 2023. Adjusting for inflation, the real-term increase was 1.4%. This marks the third consecutive year in which the median monthly income has exceeded the $10,000 threshold. Over the past five years, from 2019 to 2024, the median income of employed households increased by 3.6% cumulatively in real terms, or 0.7% annually.

In terms of income per household member, the median monthly income rose by 3.3% in nominal terms, from $3,500 in 2023 to $3,615 in 2024. When adjusted for inflation, this figure increased by 0.8%. Over the five-year period, the real increase in income per household member was 6.8%, or 1.3% per year.

SingStat also reported that government transfers were significantly higher in 2024, with resident households receiving an average of $7,825 per member. This was an increase from $6,418 in 2023, reflecting the government’s efforts to address cost-of-living, healthcare, and retirement concerns. Households living in one- and two-room Housing Board flats were the largest recipients of government transfers, receiving over twice the amount of assistance compared to the national average.

Despite this progress, income inequality remains a concern. The Gini coefficient, a measure of income inequality, rose slightly from 0.433 in 2023 to 0.435 in 2024 before adjusting for government transfers and taxes. However, after these adjustments, the Gini coefficient fell to 0.364, the lowest since records began in 2000, highlighting the effectiveness of government policies in reducing inequality.

Economic experts noted that while nominal household income growth remained strong, the real growth rate has been affected by inflationary pressures, particularly since late 2021. Factors such as post-pandemic demand surges, labour market tightness, and global crises like the Russia-Ukraine conflict have all contributed to price increases, impacting household incomes.

Looking ahead, demographic changes, particularly the ageing population, are expected to slow the growth of median household employment income. The decline in the labour force participation rate, coupled with an increase in non-employed individuals over 65, could create challenges for future income growth. However, initiatives to encourage older workers to remain in the workforce, such as raising the retirement and re-employment ages, may help sustain income trends in the long term.

In addition, experts highlighted the government’s role in promoting wage growth for lower-income households through policies like the Progressive Wage Model (PWM), which has had a positive impact on the lower income deciles. Despite overall income growth, policymakers may need to focus more on supporting the middle-income group to prevent further widening of inequality.

The latest data underscores the resilience of Singapore’s economy and its labour market, even amid global uncertainties. With continued government support, the outlook for household income growth remains cautiously optimistic, although experts caution that inflation and income disparities remain key issues to address in future economic policy.