Poverty in Singapore Grew from 16% in 2002 to 28% in 2013

Minister for Social and Family Development Chan Chun Sing had said that the government doesn’t want to define a poverty line in Singapore.

  • But what exactly is the poverty rate in Singapore?
  • How has it grown over the past 10 years and how will it continue to grow?
  • Also, how does Singapore compare to the other high-income countries, and the lower-income countries in the Southeast Asian regions?

According to a new study by the National University of Singapore’s (NUS) Social Work Department, “the working poor in Singapore … is defined as someone earning less than half of the average monthly income of a Singaporean, which now stands at S$3,000.” This is similar to what the World Bank had defined as the poverty line, which “could be set at 50 percent of the country’s mean income or consumption“. “As such, the poverty line in Singapore would be someone who earns less than S$1,500 every month.

If you look at the CPF Annual Report in 2011, where the distribution of the monthly wages of Singaporeans were last available (the government omitted this information from 2012), 458,257 Singaporeans were earning less than S$1,500 every month. This represents 26% of the Singaporean and PR population (Chart 1).

As such, it can said that 26% of Singaporeans are living in poverty in Singapore.

Slide1

Chart 1: CPF Annual Report 2011

But how has Singapore’s poverty rate changed over the past 10 years? Has it always been so high?

I looked at the statistics from 2002 (the earliest that comparable data can be found). In 2002, the median income is S$2,083, which means that the poverty line was $1,000 in 2002.

In 2002, there was 16% of Singaporeans who earned below $1,000. As such, you can see that the poverty has grown from 16% in 2002 to 26% in 2011 (Chart 2).

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Chart 2: CPF Annual Report 2002CPF Annual Report 2011

From 2002 to 2011, the poverty rate increased by 1 percentage point, on average every year. Fast forward to 2013, does it mean that 28% of Singaporeans are living in poverty today (Chart 3)?

Slide1

Chart 3: CPF Annual Report 2002

I wanted to look at how the other income classes had also changed.

In 2011, the Singaporeans lived in poverty had earned below $1,500. The middle class would be Singaporeans who earned between $1,500 and $5,000. And the high-income Singaporeans would be those who earn above $5,000.

In 2002, since the Singaporeans who were living in poverty had earned below $1,000, this would be $500 less than in 2011. Working backwards, the Singaporeans who could be classified as being in the middle class in 2002 would have earned between $1,000 to $4,500 and the Singaporeans in the high-income would earn above $4,500.

Chart 4 shows the overview of the income classes in 2002 and 2011.

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Chart 4

If you look at Chart 5, you can see the distribution of the income classes in 2002 and 2011. You can see not only has the Singaporeans living in poverty grown, the proportion of the high-income has also grown. However, the middle class has shrunk tremendously.

Slide3

Chart 5: CPF Annual Report 2002CPF Annual Report 2011

Again, you can see that in 10 years, from 2002 to 2011, the proportion of those in the high-income category had grown by 10 percentage points. Fast forward to 2013, does it mean that the proportion of Singaporeans living in poverty is 28%, and those in the high-income group has grown to 27% (Chart 6).

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Chart 6

At the rate poverty is growing in Singapore, will we see a situation in 2025 were there would be 40% of Singaporeans who would then be living in poverty, and 39% in the high-income group? By then, would there only be 21% of Singaporeans in the middle class (Chart 7)? When this happens, does that mean that nearly 40% of Singaporeans would be living in servitude to the rest of Singapore, and the government?

Slide5

Chart 7

Already, two-thirds of Singaporeans “felt they would not be able to pay for that little extra in life” and  “close to two-thirds also said that they would not be able to a big-ticket purchase like a car, appliance, furniture or major home repair” (Chart 8). If the income disparity continues in Singapore, how much worse would things become in Singapore?

Happiness and Well-Being cropped

Chart 8: The Straits Times Middle-income Singaporeans feel the squeeeze, survey finds

What if we compare Singapore to the other high-income countries, measured by the GDP per capita. You can see that even though Singapore is the richest country in the world, we actually have the highest poverty rate among the high-income countries (Chart 9)!

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Chart 9: Income Distribution and Poverty: Poverty rate (50% median income), percentage

And what if we compare Singapore to the other regional East and Southeast Asian countries? You can see that Singapore has one of the highest poverty rate among them (Chart 10)! Not only that, even though Singapore is a high-income country and the richest country in the world, our poverty rate is as high as one of the poorest countries in the world, and significantly higher than other middle-income countries like China, Thailand and Vietnam!

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Chart 10: What Do National Poverty Lines Tell Us About Global Poverty?, Poverty line set for HK

It’s terrible, isn’t it? Singapore is the richest country in the world, our government has one of the highest national reserves and surpluses in the world, and we have the highest national reserves per capita in the world, but we have the highest proportion of poor among the developed countries and the countries in our region!

One key reason is also because our government spends the least public spending for Singaporeans, as compared to the other developed countries (Chart 11).

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Chart 11: 2013 Index of Economic Freedom

Which also explains why we have the highest income inequality among the developed countries among the developed countries, and one of the highest in the world (Chart 12).

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Chart 12: OECD StatExtractsKey Household Income Trends 2012 report

So, what do you think? Do you think more needs to be done? Do you think it’s right that even though we are the richest country in the world, but there are 28% of Singaporeans living in poverty in 2013? Do you think the government needs to do more? Or actually, do you think this government would be willing to do more?

In fact, Prime Minister Lee Hsien Loong had said that, “if I can get another 10 billionaires to move to Singapore and set up their base here, my Gini coefficient will get worse but I think Singaporeans will be better off, because they will bring in business, bring in opportunities, open new doors and create new jobs, and I think that is the attitude with which we must approach this problem.”

Do you think that this is the right approach to the problem, when not only has our income inequality risen, the proportion of poor Singaporeans and Singaporeans who can barely afford to have a basic standard of living has increased?

Slide8

138 comments

  1. alex

    I can only say this – if our government was that great, we wouldn’t see so many of our elderlies cleaning toilets, food courts, working in macdonalds, picking up trash to recycle, etc.

    There isn’t even any need to compare with other countries – this is enough to let us know we have a problem.

    • gobblershop

      Indeed. Moreover, there is not enough coverage/proper channels to help out these elderly. They have been silently working behind the scenes. Given Singapore’s heavy “FACE” society, these elderly would highly reject any help because it’s seen as disgraceful. (Or in other words, their children weren’t successful enough to provide for them)

  2. Pancake

    I’m a foreigner, I am surprized on how affluent Singaporean are, but there are also so many poor elderly in tattered clothes. What happened?

  3. SGDragon

    Poverty threshold has to be adjusted annually by taking into account on total expenses average citizens consumes yearly. Rent costs and real estates for instance, fluctuates annually and play a major role, along with major policy changes. Credibility of analysis will be lost if presumptuous and unsubstantiated conclusions are drawn by merely using linear comparisons with 2002 poverty threshold and 2013 with a 11 year gap.

    • Lee

      Poverty has increased based on mean income. True poverty can also be measured by how many years an average family working man needed to save based on mean income whether in 2002 or 2013 in order to afgord a big ticket item. Generally, we can observe that properties has on average increased more than twice to four times more than in 2002. Fuel cost hss also increased to average two times or more in 11 years. So, can we deduce that $1000 poverty line needed to increase to mstch the badic need of a family. I think the real ptoblem lies with exorbitant inflation in essential items like properties ( arising from ever increasing land sale prices, fuel (which raises all things manufactured, transported and planted). Foreigners all over the world wants to come here to earn better income (if allowed) but we have realise that a high percentage of our individual wealth hss been induced or created through incresing inflation!

      • Lee

        Poverty has increased based on mean income. True poverty can also be measured by how many years an average family working man needed to save based on mean income regardless of whether in 2002 or 2013 to afford a big ticket items. Generally, we can observe that properties has on average increased more than twice to four times more than in 2002 (depending on area). Fuel costs has also increased on average two times or more in 11 years. So, can we deduce that this $1000 poverty line in 2002 needed to increase to match the basic needs of a family. I think the real ptoblem lies with exorbitant inflation in essential items like properties ( arising from ever increasing land sale prices) , fuel costs (which raises all things manufactured, constructed, transported and planted). Foreigners all over the world wants to come here to earn better income (if allowed) but we did not realise nor understand fully that a very high percentage of our individual wealth has been induced or created through incresing inflation through land/property prices and fuel costs. You will know the difference ( may not comprehend the real macro economics ) when we go over to our neighbouring country and start noticing many essential big ticket items costs half or even lower like one quarter (eg. Properties & cars ) of prices here.

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  13. Everton Rodrigues

    Comparing the poverty line in Singapore with poverty line in Phillipines is completely non sense, dont you think ? The poverty line in Phillipines is below 16.400 Phillipine Peso for a YEAR! Its the same amount of 400 Singapore Dolars. So when you use a simple graphic to do a comparision of Singapore 28% people living below poverty line and the 26% in the “same” situation in Phillipines, you are hidding crucial information. Sorry for my bad English. Cheers from Brazil.

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  15. Valts

    There are lies, big lies, and this… I am not saying poverty in Singapore is not a problem, but this article does not make any mathematical or economical sense. To measure poverty properly you must set up a basket of basic goods that everyone should be able to afford, estimate it’s price and from there get the poverty line, rather than ambiguously draw a line based on income. However if you use this flawed measure of half the average income, you will see that countries that have more rich people will also get proportionally more poor people, even if the actual number of poor people didn’t change. The government should however approach this problem seriously and solve it, rather than closing their eyes, going “lalala” and pretending it doesn’t exist.

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  19. gobblershop

    Hi Roy, any updates on the 2014 poverty issue? We’ve been reading your blog and following it closely because we are a Social Enterprise, targeting to help the poor and elderly. Thank you for writing about this issue.

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  23. lol

    With regards to charts 9 & 10: when i went to their respective sources, I failed to find Singapore in either. what bull are you trying to pull, sir?

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