Publication: The Straits Times, p A8 Date: 20 February 2010 SMU Headline: Income Gap Narrows Slightly I . 1 Income gap LESS DISTANCE BETWEEN RICH AND POOR Shgapore's income gap narrowedfor the second strabht year in 2009, largely due to government help fw narrows slightly - Isw-income hakreholds Based on original income But overall, income slipped across the board for Overall fall in incomes, families last year, when the recession pushed up un- employment and drove down wages, according to the more unequal income dlstrlbutlion. but low-income Its study of household Statistics Department. income trends among Singa- families boosted by aid pore residents, released yesterday, shows Singa- porels m i coefficient - a measure of income inequal- ity - was 0.478 last year. I BY CLAWSSAOON This is a drop from 0.481 in 2008, and 0.489 in 2007. THE income gap in Singapore has narrowed for the These figures, however, do not include govern- second year in a row. ment help. A slight dip last year is the result of higher-income Singapore Management University economist families suffering a bigger drop in lncome relative to Hoon Hian Teck noted that, after taking into account lower-income households. taxes and government benefits, the Gini coefficient At the same time, low-income families received a went down even further last year, to 0.453. " boost in government aid, including wage subsidies in The smaller the Gini coefficient, the narrower the Source SINGAPORE DEPARTMENT OF STATISTICS last year's Resilience Package and other aid schemes. income gap. ST GRAPHICS Professor Hoon thinks it is very likely thdt schemes to save lobs under the Resilience Package and income supplements for low-wage workers helped to narrow income inequality. Measures under last year's Resilience Package in- cluded the Jobs Credit wage subsidy scheme, while the Workfare Income Supplement, introduced in 2007, boosts the earnings of Singaporean workers earning $1,500 or less per month. The other reason for the declining Gini coeffi- cient last year is simply that ((when incomes fall, higher incomes have greater leeway to fall more", said labour economist Chew Soon Beng of Nanyang Technological University. The median monthly household income fell by $100 from 2008, to $4,850 last year. This 1.9 per cent slide was foreseen by analysts, given the state of the labour market then. After adjusting for inflation, the decline was 2.5 per cent. However, last year's median household income was still higher than in 2007 and the years before. Prof Hoon attributed it to "government efforts in the past five years to encourage older workers to continue working, which boosted household in- comes". While this trend was temporarily interrupted by the recession, he expects incomes to grow this year as the economy improves. The Statistics Department study shows that for the top 10 per cent of employed households, their average monthly income fell by $961 to $22,062 - a nominal 4.2 per cent drop. For the bottom 10 per cent, the corresponding in- come figures are a $9 drop to $1,303 a month - a nominal 0.7 per cent fall. DBS economist Irvin Seah said it was difficult to predict whether the income gap would further nar- row this year. He foresees the economy growing by 6 per cent and, in turn, lifting the earnings of the higher-in- come group. But at the same time, poorer households will not be left behind. "With the Government planning to tighten the tap on foreign workers, it should translate into a positive income effect on lower-lncome groups," he said. firstname.lastname@example.org Source: The Straits Times O Singapore Press Holdings Limited. Permission required for reproduction.
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