Several academics and economists have estimated that Singapore has a poverty rate of about 30%. Their research is compiled in this article.
This also means that Singapore has the highest poverty rate among the developed countries.
However, the PAP-run government still refuses to define a poverty line. Then-Minister for Social and Family Development Chan Chun Sing erroneously claim that defining a poverty line will lead to a “cliff effect”.
Also, Minister for Culture, Community and Youth Lawrence Wong also claimed that income inequality in Singapore has “stabilised” when the truth is that, Singapore today has the highest income inequality and widest rich-poor gap among the developed countries.
The PAP also spends the least on social protection among the developed countries, so much so that the poor in Singapore continue to remain poor and are left to fend for themselves.
Meanwhile, there are fewer and fewer middle-income Singaporeans, as more and more of them fall into poverty.
Yet, today Singapore is the most expensive country in the world. The PAP refuses to implement a minimum wage and the $1,000 that lowest-wage workers earn in Singapore is the lowest among the highest-income countries.
The PAP also makes Singaporeans pay for one of the most expensive healthcare, education and housing in the world and our CPF retirement funds are also one of the least adequate among the OECD and Asia-Pacific countries.
In short, the PAP does not want to take care of Singaporeans. At the same time, the PAP pay themselves the highest salaries in the world, even as many Singaporeans cannot earn enough to even have a basic living and have to live in poverty.
- 26% Of Singaporeans Live Below Poverty Line In Singapore
- Poverty in Singapore Grew from 16% in 2002 to 28% in 2013
From Yeoh Lam Keong’s research:
“The Average Household Expenditure on Basic Needs (AHEBN) is a figure calculated by the DOS. This is a measure of minimum household expenditure on essential needs such as food, clothing, and shelter for a household in a one- or two-room HDB rental flat. The resulting figure is then multiplied by 1.25 to account for other household needs (e.g., transport, education). The most recent available AHEBN estimate, as of this writing, is from 2011, and calculated to be SGD 1,250 per month for a four-person household.
Yeoh Lam Keong, former chief economist of the Government of Singapore Investment Corporation (now known as GIC Private Limited), argues, based on internal reviews of the AHEBN measure, that the measure provides a conservative estimate of absolute poverty. According to him, the costs are not explicitly accounted for by the AHEBN measure, but are included in the multiplier of 1.25 (e.g., transport, education, medical costs). They tend not only to increase more quickly than the expenditures on food, clothing and shelter, but are also necessary for work, school and social activities. Take for instance the mobile phone: it is a very helpful item to have when seeking employment, but such an expenditure is only one of many for which the multiplier of 1.25 is meant to account. Furthermore, Yeoh points out that actual transport and medical costs are taken into account for similar measurements in countries such as Hong Kong and Canada, indicating that there are precedents for their inclusion.
He discusses other problems in Singapore’s AHEBN calculation. First, it does not take into account costs related to investments in human capital, in that there are no out-of-pocket education expenditures, or costs related to continuing education, training, and access to information and communication technologies. Such educational endeavors are necessary for minimal social mobility and so have a significant bearing on poverty. For example, if people lack the means to increase their levels of education, because they cannot afford the costs of education itself, or the related costs of transport, materials, etc., it is far more difficult to climb out of the poverty trap. Finally, by only including families in one- or two-room flats, the AHEBN calculation does not account for those families living in threeor four-room flats who are receiving social assistance. Overall, according to Yeoh, the AHEBN calculation likely accounts for only a fraction of those Singaporean families living in poverty.
Yeoh used the AHEBN range of SGD 1,250 to 1,500 per month, applied it to the 2011 DOS Key Household Characteristics and Household Income Trends 2011 report, and found that there were approximately 110,000 to 140,000 resident households that have great difficulty meeting basic needs.
According to Yeoh, if the AHEBN calculation were adjusted to include the costs of transport, education, health care, and the training necessary for social inclusion, it would likely reveal that the bottom 10 to 20 per cent of working households are struggling to make ends meet in a way that could be defined as a form of absolute poverty. The bottom 20 to 30 per cent of working households, according to Yeoh, are probably barely able to meet basic consumption and human capital investment needs but have little in the way of retirement savings, leaving them vulnerable to falling into poverty in their lifetime.”
From Tilak Abeysinghe’s research:
“The households in the lowest 30% of the income ladder spend more than their income.”
“We define the middle class here as those earning approximately the median wage. Like the least advantaged Singaporeans, the middle class saw a lengthy decrease in wages followed by a very recent reversal of this trend. Although Singapore’s economy continued to grow at the same pace that it had for decades (averaging 7.3 per cent per year in the 1990s and 5.1 per cent in the 2000s), median wages slowed, and in some recent years reversed, after the year 2000. From 2000 to 2010, taking inflation into account, wages grew only 1.3 per cent per year, rather than the average rate of growth of seven or nine per cent in previous decades. In mid-2013, it was reported that, when inflation was taken into account, wage levels actually decreased in 2012.
Second, as economic restructuring moved to higher value-added industries, lay-offs have begun to affect professionals, managers, executives, and technicians (PMETs) at higher rates than low-skilled workers. The Straits Times reported that PMETs made up more than half of the workers who lost their jobs in 2013, at 56 per cent. This is a significant increase from the 35 per cent of PMET job-losses in 2010. In addition, the manufacturing and construction sectors also laid off more workers in 2013 than in 2012, while the service sector let go fewer workers in 2013 than in 2012. Again, this suggests that the situation began to improve for the lowest deciles before the trend affected the middle class.
Finally, two recent studies suggest that the backdrop for Singapore’s high Gini coefficient and lengthy period of wage stagnation is a city that is becoming increasingly less affordable. The Economic Intelligence Unit (EIU) ranked Singapore as the world’s most expensive city in 2013. Singapore was positioned sixth in the previous year, but its appreciating dollar has since pushed it to number one in the world. The EIU report looks at the prices of various goods and services in different countries (e.g., food, clothing, and transport) and uses New York City as a baseline. Around the same time that the EIU released its report, the National University of Singapore (NUS) economics don, Tilak Abeysinghe, published a study and extrapolated from data from the DOS, which found that 30 per cent of Singapore’s households have had to cut back on “flexible expenditures,” based most likely on the rising costs of big ticket items such as housing and health care. His study, quoted in Today, suggests that the bottom 30 per cent of households require “extra attention in the government’s welfare programmes.”
From Tommy Koh:
“I am disturbed by the inequality in Singapore. We have one of the highest Gini coefficients in the world. I am unhappy that many of our children are growing up in poverty. About a third of our students go to school with no pocket money to buy lunch.
As a trustee of two education trusts, I am reminded each year of the large number of needy students in our schools and tertiary institutions. I was shocked when the president of one of our universities told us recently that 60 per cent of his students need financial assistance.
At the other end of the spectrum, I am worried about the growing number of the elderly poor. Many of them are in poor health and have inadequate savings. Many of them live in loneliness, having no family or been abandoned by family and relatives.”
“Still, one cannot deny that student poverty exists. The Straits Times School Pocket Money Fund helps more than 10,000 students each year.
I am a trustee of the Lee Wee Kheng Charitable Trust. Each year, we donate about $1 million to help needy students in our schools. The Ministry of Education helps identify the 100 schools with the highest number of needy students, and we give $10,000 to each of the schools.
I am also a trustee of the Tan Chay Bing Education Trust. We give bursaries and scholarships to needy students in the universities, Nanyang Academy of Fine Arts, LaSalle, Shatec, the Intercultural Institute and others. The bursaries are a lifeline to some. Without our help, they would most likely have to abandon their studies or work part-time. The needs exceed our ability to help.”
From Mukul G. Asher:
• Singapore has no official poverty line
• Absolute poverty is based on the Minimum Household Expenditure (Actual expenditure for subsistence budget x 1.25). Approx. 35% of households.
• Relative poverty is half of the median per capita household income. Approx. 27% of households.
• Working definition ‐ the poor / low income group is basically bottom 30th percentile of households, that is with average monthly household income from work equal to $1862 or below. Approx 227,400 households.
• Singapore has a limited public assistance program.
• Less than 5% of households in the low income group are beneficiaries of state funded systems; and only 0.07% of the population received public assistance in 2004.
• The amount of assistance is kept deliberately extremely low at around 5‐8% of per capita income.
• The end result of these social policies has been to make individuals and their families bear disproportionate risks of old‐age and low incomes with grossly inadequate social risk pooling.
• It is now reluctantly acknowledged in Singapore that the CPF system will not be adequate to meet the ageing challenges.
• There are several reasons for this inadequacy. A single‐tier, involving mandatory‐savings, can never provide adequate replacement rate; or address inflation and longevity risks; or provide survivor and disability benefits
From Hui Weng Tat’s research:
“Levels of relative poverty can be estimated in various ways. A common way of estimating the incidence of relative poverty involves using the median wage as a benchmark, and those whose income is less than half the median wage are considered poor in the relative sense. Irene Ng suggests that using this measure to estimate relative poverty in Singapore is difficult, because income distribution is reported in deciles. Nevertheless, Ng proceeds by assuming that the reported mean incomes fall at the midpoint of each decile, and estimates that around 20 per cent of Singaporean households are poor by these standards.
Hui Weng Tat provides a different estimate of households living in relative poverty in Singapore, using a similar way of measuring it. Hui understands this relative poverty line to be set at 60 per cent of the national median equivalised income. According to his measure, the incidence of relative poverty is around 35 per cent in Singapore. Both Hui and Ng argue that the number of Singaporeans living in poverty, according to relative measures, is in general increasing. However, some of this trend may be currently reversing.”
Is this the way a government should run a country? The PAP is no longer a party that cares for Singaporeans. The PAP is no longer a government.
It is time Singaporeans do what is right and vote for a new government to protect ourselves.
SAY NO TO PAP