February 14, 2025
SINGAPORE – Median household employment income grew to $11,297 in 2024, while income inequality fell to its lowest level in 25 years, after accounting for government assistance and taxes.
Figures from the Singapore Department of Statistics (SingStat) also showed that resident households got more money from government schemes, due to support measures rolled out in 2024.
SingStat’s Feb 13 report showed that among resident employed households, median monthly household employment income grew by 3.9 per cent in nominal terms, before adjusting for inflation.
This is the third time in a row that the median monthly household employment income has crossed the $10,000 mark – $10,099 in 2022, $10,869 in 2023 and $11,297 in 2024.
Median monthly household employment income rose 1.4 per cent in real terms, or after adjusting for inflation, in 2024. Household employment income includes employer Central Provident Fund contributions. This is lower than the growth in 2023, which was 2.8 per cent.
From 2019 to 2024, median monthly household employment income of resident employed households increased 3.6 per cent cumulatively, or 0.7 per cent per annum in real terms.
Such households have at least one employed person, and the household reference person – previously referred to as the head of household – is a Singapore citizen or permanent resident.
Taking into account household size, median monthly household employment income per household member rose from $3,500 in 2023 to $3,615 in 2024 – an increase of 3.3 per cent in nominal terms, or 0.8 per cent after adjusting for inflation.
From 2019 to 2024, median monthly household income per household member grew by 6.8 per cent cumulatively, or 1.3 per cent per annum in real terms.
In 2024, households across all income deciles saw increases in average household employment income per household member after adjusting for inflation.
In 2024, the average household employment income for each household member in resident employed households in all income groups rose in nominal terms, with the increases ranging from 3 per cent to 5.9 per cent.
After adjusting for inflation, the increases ranged from 0.6 per cent to 3.2 per cent.
Between 2019 and 2024, the average household employment income for each household member in resident employed households in the first nine deciles rose by 0.3 per cent to 1.9 per cent per annum in real terms, while that for households in the top decile declined by 0.7 per cent per annum.
A decile is the one-tenth of all households arranged by their incomes from lowest to highest. The last, or 10th, decile is the one-tenth of the households with the highest incomes.
The Gini coefficient based on household employment income per household member rose from 0.433 in 2023 to 0.435 in 2024, before taking into account assistance or benefits provided by the Government and taxes.
After such adjustments, the Gini coefficient in 2024 was 0.364, lower than the 0.371 in 2023. This is the lowest since records of the measure began in 2000, said SingStat. The Gini coefficient is a measure of income inequality. A Gini coefficient of zero occurs when there is total income equality, and one means there is total inequality.
SingStat also reported that resident households, including households with no employed person, received $7,825 per household member, on average, from government schemes in 2024.
This was higher than the $6,418 received in 2023. “This was due to measures rolled out in 2024 to support households in areas such as cost of living, retirement and healthcare needs,” said SingStat.
Resident households living in one- and two-room Housing Board flats continued to receive the most government transfers.
In 2024, they received an average of $16,805 per household member from government schemes, more than double the amount received by all resident households.
Mr Jester Koh, UOB’s associate economist, said the real median household employment income grew by a softer clip in the recent five-year period as the strong nominal growth has been largely eroded by the inflation surge since late 2021.
“This is likely driven by a confluence of factors such as the unleashing of post-pandemic pent-up demand, tightening of labour markets amid labour supply shortages, and the Russia-Ukraine war, which led to food and energy price spikes,” he said.
Going forward, the rapidly ageing population could weigh on the median household employment income growth as the labour force participation rate has been gradually declining since 2021, while the share of resident households comprising solely non-employed people aged 65 and older has been gradually ticking up, Mr Koh said.
“Nonetheless, there have been several initiatives to encourage older-age workers to continue working, such as the planned increase in the retirement age to 65 by 2030, re-employment age to 70 by 2030, as well as the Earn and Save Bonus under the Majulah Package, which should go a long way to support median household employment income trends in the long run,” he added.
Mr Song Seng Wun, economic adviser at CGS International, said median household employment income growth slowed in 2024 as the labour market normalised. This is likely the growth range for the next few years.
In contrast, there was faster growth in median monthly household employment income post-pandemic as companies started to hire again, and the economy rebounded strongly.
Those in the lower income deciles are aided by the Progressive Wage Model (PWM), Mr Song said, adding that there will be higher growth among the lower-income as more sectors are included in the PWM.
The Government’s transfers have also helped the lower-income, and helped decrease income inequality.
“This is where the Government can calibrate in terms of assistance in the upcoming Budget to help those who need the help most,” he said. “The cost of living is still rising, though inflation has slowed down.”
Associate Professor Walter Theseira from the Singapore University of Social Sciences, who is a labour economist, said higher income growth in lower deciles aligns with efforts to raise wages for lower-income Singaporeans through policies like PWM.
For the upper decile, he noted that non-employment income and capital gains, which are not included in the figures, are likely key factors for increasing income inequality, but they are not measured in the report.
“Recent strong growth in income for higher deciles outstripping the middle suggests income inequality will worsen without more government intervention,” he said.
“Policy attention will likely need to be increasingly focused on helping the broad middle – although this is always the case – given the recent pattern of how the lower-income are ‘levelling up’ and how the higher-income are enjoying above-average gains.”
Mr Chua Han Teng, an economist at DBS Bank, noted that Singapore’s real median monthly household employment income continued the increases observed in the preceding three years from 2021 to 2023.
“The sustained real income growth reflects Singapore’s economic resilience and healthy labour market performance despite rising global uncertainties,” he said.
“The ongoing decline in household income inequality reflects the Government’s policy focus on greater equality and inclusivity over the years, with government transfers providing crucial support and assurance for vulnerable groups,” he added.