Source: Key Household Income Trends 2012, by Dept of Statistics
Minister for Social and Family Development Chan Chun Sing ruled out having an official poverty line. He was speaking in reply to Non-constituency Member of Parliament Yee Jenn Jong (Workers’ Party). Chan said it would not fully reflect the severity and complexity of issues faced by the poor, and may also lead to needy persons who happen to be above the line missing out on assistance. The full text of the question and written parliamentary reply is as follows:
Parliamentary sitting, 21 October 2013
Question by Yee JennJong:
To ask the Minister for Social and Family Development whether the Government plans to introduce an official poverty line adapted from international practice to identify at-risk households and to measure the performance of governmental and non-governmental efforts in helping them leave the poverty cycle.
Written Answer by Chan Chun Sing, Minister for Social and Family Development:
Different countries tailor their methods to identify and assist their needy according to their circumstance. Even amongst developed countries, New Zealand and Canada do not subscribe to official poverty lines. In Singapore, we use broad definitions for the groups we seek to help, have clear criteria to identify and assess those in need, and tailored schemes to assist them. A poverty line does not fully reflect the severity and complexity of the issues faced by poor families, which could include ill health, lack of housing or weak family relationships. If we use a single poverty line to assess the family, we also risk a ‘cliff effect’, where those below the poverty line receive all forms of assistance, while other genuinely needy citizens outside the poverty line are excluded. Our assessment process is rigorous but also flexible to cater to the genuinely needy. Singaporeans who do not meet scheme criteria but who still deserve help, can receive assistance.
— Link to press release at Ministry of Social and Family Development website
Social media tore at the “cliff effect” that he mentioned. And rightly so. Look carefully at Yee’s question. He was suggesting that having an official poverty line would do two things: identify at-risk households and provide a convenient longitudinal gauge of the effectiveness of policy intervention. He did not say that a poverty line is all that is needed to “fully reflect the severity and complexity of the issues”, nor did he suggest that “those below the poverty line receive all forms of assistance, while other genuinely needy citizens outside the poverty line are excluded.”
Chan Chun Sing
Chan Chun Sing twisted the question into this form in order to knock down the idea. This is not engagement. It is contortion and misrepresentation in order to avoid engagement.
A good government will always have a multiplicity of help schemes for the poor and underprivileged. Each help scheme will have its own set of eligibility and means-testing criteria, simply because each help scheme seeks to address a specific need. But precisely because there’s a multiplicity of programmes, each with varying criteria, it becomes too complex for the public to have an easy grasp of whether we’re moving forwards or backwards.
A simple measure like a poverty line is a rough indicator but a useful one to know how we’re doing. Nobody is suggesting that it becomes the only criterion for receiving state support; nobody is arguing for a “cliff effect”.
Secondly, a poverty line helps direct resources a little better. Without it, there’s a tendency to sit back and say, we have all these schemes and it’s up to the indigent folks to approach us for help. The reality is that the indigent also tend to be cut off from information because of economic deprivation. Having an at-risk indicator like a poverty line helps social help providers to know who they should pro-actively approach with the possibility of offering help. Which doors should we knock on?
Chan’s answer reinforces a general view about this government. They really do not want to provide social assistance. At heart they really do believe in trickle-down and little else. They only get into social assistance when they can’t avoid it and a problem is staring them in the face. More effort is spent trying to excuse themselves from doing anything, rather than propel themselves to deliver assistance. Twisting Yee’s words in order to avoid accepting the value of having an official poverty line is entirely consistent with this government’s character.
Undoubtedly, they are afraid that once an official poverty line is drawn, the ineffectiveness of existing social support becomes clearer, with at-risk numbers refusing to budge year after year. Public pressure to do more becomes hard to resist. Doing more, however, is not what the government wants.
How about using the same formula as Hong Kong for a poverty line?
Nothing should stop civil society from arriving by consensus at a poverty line. If the government won’t set one, we’ll derive our own. Used repeatedly over time, it will gain acceptance as a measure of our society’s social wellbeing. The easiest, especially if we want comparability, is to follow Hong Kong’s definition.
Carrie Lam
So first, we need to understand how Hong Kong’s official poverty line is set. Let me quote Chief Secretary Carrie Lam’s statement:
The poverty line is defined as half of the median monthly household income of all domestic households in Hong Kong, prior to government intervention like tax and social benefits transfers. This approach is based on the concept of relative poverty as opposed to absolute poverty expressed in terms of basic subsistence.
The commission considers that in an affluent city like Hong Kong, poverty can no longer be understood merely by the lack of ability to afford minimum subsistence. Relative poverty acknowledges that the definition of poverty should move with the times and change with general living standards.
This is in line with the current Government’s thinking that we should put in place a reasonable and sustainable social-support system where different strata of society can share the fruits of economic development.
For 2012, the poverty line was $3,600 for a single person, $7,700 for a two-person household, $11,500 for a three-person household, $14,300, $14,800 and $15,800 for a family of four, five and six & above respectively. These poverty thresholds will be reviewed annually in line with the median monthly household income movement.
— Statement from Hong Kong Information Services Department, 30 September 2013, link: http://www.news.gov.hk/en/record/html/2013/09/20130930_110325.lin.shtml
The statement continues, cautioning readers to be conscious of the limitations of such a simple, broadbrush measure:
While easy to understand and comparable to international and local practices, the income-based poverty line has its limitations.
Specifically, the median monthly household income measures only income without considering assets. Some “asset-rich, income-poor” people, such as better-off elderly people or retirees, may be classified as poor, thus overstating the poverty problem.
Given the relativity concept, poverty cannot be eliminated. Indeed, an economic upturn with a broad-based improvement in household income does not guarantee a decrease in the size of the poor population, especially when the income growth of households below the poverty line is less promising than the overall. There will always be people below the poverty line.
— ibid
When we try to use the same definition as Hong Kong to derive a poverty line for Singapore, we immediately run into problems. Firstly I am unable to establish how “income” is defined in Hong Kong for their household income survey and for the purposes of poverty line calculation. Some tables from Hong Kong Statistics (e.g. in this report: Household income distribution in Hong Kong) appear to use the term “income from main employment”; other tables just say “income”. Data from Singapore’s Department of Statistics website (e.g. a report called Key Household Income Trends 2012, published in February 2013) tend to be based on “income from work” or “income from employment”. I can only hope that Singapore’s and Hong Kong’s mean more or less the same thing.
Moreover, one has to be cautious, for self-employed persons (e.g. hawkers) often do not declare their income from work accurately. And some households have significant income streams, but not from work. Singapore’s Department of Statistics points out in the same cited report (footnote, page 6) that “19% of resident employed households in the lowest 10% [decile] owned a car or employed a maid.”
Secondly, what does Hong Kong mean by “all domestic households”? Singapore uses “resident households”. How different are these concepts? I can’t quite work it out, so once again, I can only hope that the difference is not material.
Deriving Singapore’s poverty line
To figure out Singapore’s poverty line, we first begin by establishing the median income. Median income of what? There are various categories of households. From the above-mentioned report (Key Household Income Trends 2012), pages 30 and 31:
The figures refer to households headed by Singapore citizens or permanent residents (thus “resident”). “Resident employed households” means households that have at least one working person, while “resident households” includes those where no person works. The relevant numbers of households, taken from page 3 of the report, are:
You will also notice that in Table 1, I have chosen to extract not just the median household income but the median household income per household member. This is to eliminate the variability that springs from household size. Doing this is essential if we want to compare across several years, since households can gradually become larger or smaller over time, for all sorts of social factors.
Using the same formula as Hong Kong, the poverty line is half the median income (all resident households). Since the median as indicated in Table 1 is S$1,913, so the poverty line is S$956.
At first glance, it may seem a bit high. When I informally asked a few friends what they might consider a poverty line per head, most answered somewhere around $500 or $600, i.e. $2,000 – $2,400 for a family of four.
However, the figures in Table 1 are inclusive of employer’s Central Provident Fund (CPF) contributions. So if the per head income straddling the poverty line is $956, it generally means that the take-home income is one-third less, or around $650 per head. Another way to look at it is to consider the fact that in most other countries, people pay rent. In Singapore, they are more likely to pay a mortgage, but it still comes out of the monthly income, albeit that it mostly comes out of the CPF portion. In other words, a poverty line at $956 per household member is not far off what people here consider as the amount of money needed to survive ($500 to $600 per person per month).
In any case, if we want comparability with other countries, we should adopt a similar formula. OECD countries generally use a line drawn at 60 percent of median household income.
What percentage of households are under the poverty line?
Now that we have established the poverty line for Singapore, the next question is: What percentage of households are under the poverty line?
Here we face two problems. Firstly, Singapore’s breakdown of household income is only based on Resident Employed Households. I cannot find a breakdown based on Resident Households (which includes households with no working person). Yet the latter is what I need, because the median income I am using is the median income of Resident Households. Secondly, even the breakdown based on Resident Employed Households is by decile; it is not fine-grained enough for our needs. It would have been better if we could see a percentile breakdown.
Consequently, I have to make an estimate. Here are the average incomes per decile of Resident Employed Households
All those in the first decile and about 80% of those in the second decile would be under our poverty line of $956. They comprise about 188,000 households (since each decile = 104,600 households). Adding in the 106,000 households that have no working member (and thus no income from work) we have a total of about 294,000 resident households under our poverty line.
That makes about 25.5 percent of all resident households in Singapore.
Compare this with Hong Kong.
In the territory, for the same year (2012) the percentage of the population below the poverty line is 19.6 percent, according to the South China Morning Post (1.3 million Hongkongers live in poverty, government says, but offers no solution, 28 Sept 2013), and Bloomberg News:
About 1.3 million people, or 19.6 percent of the population, were below the poverty line last year, according to a report commissioned by Chief Executive Leung Chun-ying and released on Sept. 28. The benchmark, determined for the first time, was set at half of the city’s median household income, excluding impact of tax and welfare transfer, the report said.
— Bloomberg, 29 Sept 2013, Hong Kong Poverty Line Shows Wealth Gap With One in Five Poor, by Fox Hu and Michelle Yun. Link
At first sight, it may appear that Chief Secretary Carrie Lau’s statement in September 2013 gave different figures. She said that “Hong Kong’s poor population in 2012 was around 1.02 million, or 403,000 households, representing a poverty rate of 15.2%.” But if you read carefully, she was referring to the figures after policy intervention, i.e. after receiving cash-based benefits from the government under policies like social security and student financial assistance. This is not comparable to what we have calculated for Singapore.
Has below-poverty-line percentage grown over time?
An obvious follow-up question is whether the percentage of households under the poverty line (going by the same formula) in Singapore increased over the last decade. Regrettably I’m not able to offer the figures here, because the effort involved in trying to dig up the base data from the Department of Statistics website is too daunting. I think the figures are somewhere there, but it will probably need a few days’ searching, and this post will be badly delayed as a result.
My guess is that the percentage has increased slightly from ten years ago (2002). I refer you to the graph showing the Gini coefficient of per-member household income, right at the top of this article. You can see that the Gini has increased.
The next table is also instructive.
(You may need to click on it to enlarge)
It shows that in 2002, the average income per household member in the richest decile was 21 times that of a household member in the poorest working decile. But by 2012, this gap had grown to 26 times.
In 2002, the average income per household member in the 6th decile (i.e. 51st – 60th percentile) was 4.85 times that of a household member in the poorest working decile. By 2012, this ratio had grown to 5.35 times.
Consistent with the Gini coefficient graph, this suggests that the income gap has been widening and that the less well-off are falling further behind the rich, and the median income. Logically therefore, the percentage who are below half-median income (which our formula uses as the poverty line) has been increasing.
The government surely knows this. Nor is it totally hidden, though for me to show you this, I had to tunnel through data and speak about esoteric statistical things. It would be easier for the layman to have a few simple measures laid out, among which would be the percentage of people or households under a poverty line.
But easier for laymen means adverse trends become more visible, which in turn means it becomes more likely that the ruling party might be pushed over a cliff.
Yawning Bread 
Good analysis, although I have never been a fan of measuring relative rather than absolute poverty. It just feels like a proxy for inequality which is not what most people think of when they hear the word “poverty”.
It would be great to do the same analysis with data from 5 years ago for comparison. If you don’t I guess someone else will! If we accept the relationship between inequality and relative poverty, it seems very likely that things have gotten worse. I imagine by absolute poverty standards, things have probably got much worse too.
From what I have read, the US is another country that does not measure relative poverty the way we have. Its Census Bureau releases data on absolute poverty, though a quick glance at this link doesn’t tell me much about how they define absolute poverty. There is some allusion to the percentage of income a family spends on food — I guess it makes sense, a family in dire straits would cut back on everything else but still needs to eat.
Anyway, for 2012, the poverty threshold for a family of four is an annual income of US$23,492. (Source: http://www.census.gov/hhes/www/poverty/data/threshld/ and this Reuters report) This represents 15 percent of the US population.
US$23,492 per year is roughly S$29,365, or S$612 per person per month. This is strikingly similar to what my straw poll of my friends found: anything below $500 – $600 per person in Singapore would be poverty. The cost of living in Singapore is not substantially different from that in the US.
—
If I use this threshold of S$612 per person a month as a very rough indicator of absolute poverty in Singapore, then just about all the first decile (see the article’s Table 3) comprising 104,600 households would fall under this line. As would all households (106,000) with no working income. This total of 210,600 household make up 18.3 percent of the grand total 1,150,000 Resident Households in Singapore.
So if you want a rough guide to our absolute poverty rate, that’s your figure: 18.3 percent, or roughly one in five.
Another possible proxy indicator might be the percentage who do not pay income tax.
obviously SG would not want to adopt the HK poverty line formula, since a larger % would be below the line in SG than HK and it would look bad, something the government would prefer not to draw attention to; the situation is consistent with Gini data showing greater wealth disparity here
I am sure many economists/sociologists can come up with various explanations/solutions about this, but I recall a study by MIT professor Alwyn Young 20 years ago
Click to access c10990.pdf
pointing out the lower “total factor productivity” of SG versus HK because the per worker capital investment in SG was much higher than HK; I believe this is due to (a) concentration of capital in the hands of government and GLCs (b) greater representation of heavy industry (often related to national defence needs and derived activities, with government participation, e.g. aerospace industry); there is also a difference between the social welfare policies between HK & SG
How is gini derived? Provided by PAP government or internationally compiled?
http://en.wikipedia.org/wiki/Gini_coefficient
Contrary to the Honourable Minister, as a 30+ year resident in Ontario, Canada, I believe that “poverty guidelines” are used in Ontario and Canada.
Although the amount of social assistance provided by the government is not very much, there is social assistance in Ontario.
Please refer to: http://www.povertyfreeontario.ca/poverty-in-ontario/status-of-poverty-in-ontario
In addition, for bankrupts, the Office of the Superintendent of Bankruptcy provides a Surplus Income Standard for Trustees in Bankruptcy to calculate the amount of monthly surplus income payments which bankrupts are required to pay.
Please refer to: http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br03093.html
(for a household of one individual, the Surplus Income Standard is $2,006)
Alex, can you explain why the government is stubbonly refusing to set a minimum wage. This would go a long way to alleviating the poverty of the bottom decile or even quartile. Apart from that it would encourage productivity and even lower immigration.
Isn’t it obvious? Minimum wage is an absolute sin according to the trickle down theory.
Alex,
Many economists today have acknowledged that the trickle down effect don’t work and only the govt is in the position to distribute to the lower strata what it collects from the rich.
In the case of Singapore, it is quite apparent that the govt has been collecting substantial amounts from everybody (including the poor, through GST ). But while govt coffers continue to swell, only a stingy amount is re-distributed back to the general population through ‘rebates’ of this or that description. Characteristically, such ad hoc ‘givings’ are done entirely at govt’s initiative- only when it feels like it and often for political motives rather than economic reasons.
Clearly, the poor and needy have been receiving and would continue to receive very low govt priority because they have very little bargaining powers to speak of, except a vote once in every five years.
To the PAP govt it deserves all the taxes it has been collecting in the same way that it has reasoned that Singapore ministers deserves their million dollars pay packet. That’s the reality according to the gospel of the Lee family. Father and son sees the rest of the cabinet as working for THEM, the familee, not the people of Singapore.
Think about who is the largest employer in Singapore. All those GLCs, owned by Temasek or GIC or whoever. If you look at the largest companies in Singapore (top 30 on the SGX), the government owns or controls the largest holding in more than half of them. Is the government really going to introduce legislation to increase the cost of doing business for all the companies it owns? They want to keep their own costs down. Especially since you know who is running TH, their returns on equity are a political hot potato.
So what we see is something like the opposite, salaries are depressed while government companies reduce costs by going overseas to hire workers directly (SMRT hiring bus drivers from China, SIA hiring cabin crew from Taiwan, etc).
Roy wrote something about it on the hearttruths. He also got 25% below povertyline.
Ah, how interesting!
Just found it (http://thehearttruths.com/2013/10/25/26-of-singaporeans-live-below-poverty-line-in-singapore/) He’s using a different approach and arriving at a similar figure.
After reading both your analysis and Roy’s analysis, I find yours much more credible as you have been more open with your methodology and also likewise transparent about its limitations.
I feel that such intellectual openness and an openness to the limitations of one’s own work is very important. These are values Roy unfortunately lacks despite his valiant efforts to raise up important social issues. It’s unfortunate I have to raise it up here, but his work tends to be quite slipshod and when his work is criticised he thinks that there is a conspiracy against him. Readers are advised to browse the comments (e.g. at http://thehearttruths.com/2013/11/25/singaporeans-pay-the-most-expensive-university-tuition-fees-in-the-rich-countries/#comments) to see if this is indeed the case.
Regarding the poverty line and the government response: I agree that the government does have motives for not wanting (daring?) to release a solid figure, but I won’t go as far as to say that they distorted the meaning of Yee Jenn Jong’s question. After all, the main thrust of the question is to find out whether the government’s going to publish an official poverty line; the government responded by saying No and giving its reasons.
That said, it’s still true that these reasons may be misguided and have an uncharitable intent. I’m glad there are people who have raised this issue up and I admire your efforts in trawling through the statistics to come up with a figure.
So what is Yee Jeng Jong’s next step?
He could organise a rally at Hong Lim park and state his case with his WP’s colleagues. He could show some passion because at issue are a group of Sporeans who are unable to access the govt’s programs.
He could also call for a press conference and with his worker’s party colleagues critique robustly Chan’s reply in Parliament.
The reality is that Jeng Jong and the WP, unlike his counterparts in HongKong, will do nothing.
Uh? U mean speakers’ corner? Rally like HK? The problem is how many will attend? Even the poor are too preoccupied with work to attend. WP can only do so much. The rest really have to rely on Singaporeans themselves.
Do something…anything! WP can do more.
Parliament is only one avenue to express a point of view.
Right … these 10% of MPs should go on hunger strike (CSJ style with glucose drips) to prove their point. They should protest at Speakers corner and hold repeated protests until their demands (of the 10% of MPs) are met (never mind the dwindling attendance with each repeated rally). When they cannot hold their emotions in check, they should scream at the PM, “where is the people’s money!!!”. More noise please .. because more noise means more effective. This should engender them to the middle-of-the-road Singaporeans (particularly those who do not closely follow online media) and help them win over the hearts of the majority of Singaporeans. Yes, show some passion .. more noise .. more demonstration … Yes, the problem lies with these 10% of MPs, not with the 90%.
Meanwhile the PAP will just watch this reinvogorated MPs dig their own grave. And when any of them just barely cross the line, sue and bankrupt them. This will make them heroes in the eyes of Singaporeans (although having to spend years in the bankruptcy wilderness means that they are in effect not in any position to represent Singaporeans in Parliament).
Brilliant!!
Calm down and dont get hysterical.
There are constructive ways to get your point across without alienating the broad middle in the electorate. WP need to be creative and find ways to share their views with some passion.
By now we should be very with this Garhmen’s motto: Keep them in the dark and feed them bullshit.
Since this article compares data from Hong Kong and Singapore, I would like to relate a personal experience.
The Population White Paper presented earlier this year compared some population statistics for Hong Kong and Singapore which piqued my interest and I decided to attempt some basic research to try to understand how the published figures as reported in the main stream media were derived, as they seemed, to me, counter-intuitive.
I did a quick search on the Hong Kong govt’s website(s) and was pleasantly surprised at how easy it was to get the data that I was interested in (eg time series data, historical reports). Related info was quickly found, sometimes just a click away. I went away with the impression that the data publishers went through a lot of effort to organise their data sets and papers in a way that they hope might be helpful. I felt that they tried to anticipate a particular train of enquiry and attempt to get all the relevant data to the searcher as quickly as possible.
A similar attempt at the government website(s) of Singapore proved to be much more challenging. I basically had to “click all over the place” to ferret out little cul-de-sacs where perhaps the paper that I was interested in MIGHT be located. And sometimes time series data can be difficult to locate (eg Year 1 and Year 3 on the same, but Year 2, well must be somewhere around). But with perseverance, I got enough of what I wanted.
I probably have poor search skills; maybe I got lucky with HK; maybe a bit of everything – I don’t know.
But I loved the Hong Kong websites so much more, and I like to acknowledge the efforts of the Hong Kong publishers. Thank-you. Your data basically wants to be read.
Same experience here, last night when I had to search both the Singapore and HK stats websites.
I don’t think you are alone. Leong Sze Hian wrote previously about how hard it was for him to find certain data on MOM, and some reports were apparently discontinued etc. http://leongszehian.com/?p=5833
I think we all heard the quote “deaf to all criticisms”. We should add “blind to all unflattering statistics” too. Of course, criticisms can be silenced online with law suits etc. Unflattering statistics can be buried online or just not published in the first place!
u’re very late with this piece on how the govt is trying to baffle us with BS, alex. they’ve been doing it for DECADES! in fact, it is the case almost every time they open their mouths….
as for poverty figs, perhaps a word with Lawrence lien and caritas? they are trying to do something about alleviating poverty here.
btw, it is yee jeNN jong.
Hi,
Interesting post, and very illuminating. However, you made a grave mistake when arriving at the 25%: “Adding in the 106,000 households that have no working member (and thus no income from work) we have a total of about 294,000 resident households under our poverty line.”
Just because they have no income from work, does not mean they have no income at all, seeing as their median per-person income is not too far below the employed household ones. I would conservatively guess-timate only about 36% of those households are actually below the poverty line (twice that of employed households).
Additionally, some people in the 3rd decile of the employed households could be below the poverty line.
Sorry, this makes no sense.
“seeing as their median per-person income is not too far below the employed household ones” – they have zero income from work.
“I would conservatively guess-timate only about 36% of those households are actually below the poverty line” – on what basis???
“Additionally, some people in the 3rd decile of the employed households could be below the poverty line.” – almost impossible, from the sheer definition of third decile.
Sorry, misread your first table a bit, hence the median income mistake on my end. I also take back my 36% on that basis. The percentage may be higher than that, or lower, I cannot really tell.
However, lumping in ALL no-work-income households into the “poor” category also makes little sense. I think you will need to justify that assumption, if you want to use it. Note that includes 69,000 retiree households – of which many are poor, I presume, but not all.
I would think the poverty portion of the no-work-income households would be high, but not 100% as you presume in your article, due to the following reasons:
1) The number includes 69,000 retiree households
2) The number also includes households which are not poor, but which derive no income from work. These could be households getting income only from renting out their properties, or living on their investments, or similar.
Also, the fact that your poverty line is about $1,000 and heart truth’s one is $1,500, yet you arrive at about the same percentage, should give you an indication that your percentage is off. Or in other words, you cannot both have the right number.
Overall, though, let me say again that your approach is good, and it is a good thing you and heart truths are trying to get to the bottom of this.
“However, lumping in ALL no-work-income households into the “poor” category also makes little sense. I think you will need to justify that assumption, if you want to use it. Note that includes 69,000 retiree households – of which many are poor, I presume, but not all.”
Nowhere in the article did I justify using the formula: Poverty Line = half the median income for all domestic households, except to say, if we want comparability with Hong Kong, we need to use the same formula as Hong Kong.
If we want comparability with OECD countries, we will need to use the same formula as OECD: Poverty Line = 0.6 x median income for all domestic households.
Once we use the formula, any household with no income from work, including retire households will be treated as zero income; it is automatic.
You are right in the sense a poverty line can be a flawed measure, but all measures are flawed one way or another. As I said at the top of the article, its main purpose is as a simple-to-calculate (even civil society can do it themselves without depending on govt) comparative guide to see how we’re doing vis-a-vis other countries and over time.
Re Roy Ngerng’s, I won’t comment on whatever formula he used.
Yawningbread,
I find it disappointing that you seem to be evading the main point I am trying to make. I have no problem with using half or 60% of the median monthly income as the poverty line, since that is pretty much international standard. My intent was to help you make your statistics more sound, and thus better to defend. You can still keep it simple by making broad comparison assumptions, or extrapolation; but there is a point where making it too simple simply leads to the wrong numbers.
I don’t see the automatism in saying that if a household has no income from work, thus it has no income. It is a flawed assumption to make. It only becomes more flawed if all retiree households are included in the “poor” household numbers, since most are receiving pay-outs from their retirement fund (albeit not a lot, from what I know). Even the OECD, that you quote, points this out at http://www.oecd-ilibrary.org/sites/factbook-2013-en/03/02/02/index.html?contentType=/ns/Chapter,/ns/StatisticalPublication&itemId=/content/chapter/factbook-2013-26-en&containerItemId=/content/serial/18147364&accessItemIds=&mimeType=text/html : “Income is defined as household disposable income in a particular year. It consists of earnings, self-employment and capital income and public cash transfers; income taxes and social security contributions paid by households are deducted.”
The OECD does not start from income-from-work, but from income overall. Now, it is fair to use income-from-work as main indicator in your calculations, if you take the assumption that those in the bottom two deciles are unlikely to have other incomes, since their savings will be low, considering the high cost of living in Singapore.
I think if you have no numbers on the income of the no-work-income households, it may be better to leave them out of the equation, i.e. just count the numbers of “working poor” (18% with the above). Alternatively, make some well founded estimation of the percentage of no-work-income households that are below the poverty line. Either way, the percentage would still be shockingly high, so I do not think it would distract from your main point at all.
Another point to note: you are taking the median income of households including employer CPF as a basis – which is ok, as you are using it throughout consistently. The net income will thus be that number less employer AND employee CPF, i.e. less 30% approximately (maybe a bit less, I don’t want to look the percentages up right now). That in itself already highlights another issue, because it shows that even among the working population, the median net income after CPF is 2100 less 30%, i.e. about 1470, which is a very low number IMO. The tax is negligible at that level, so that would essentially be the OECD definition of disposable income. Note that this means that half the working households earn a net income of $1,500 or less per household member.
As you can see, when the comparison is done in dollar figures and plotted as a time series, the widening income gap becomes even more apparent.
[link] http://sgratrace.appspot.com/household.html
From 2000 – 2012, the 1st decile has only gained $233, with declines in between. A simple average would mean an annual increment of $20
From 2000 – 2012, the 10th decile is the biggest winner, having almost doubled their income with a gain of $14,150.
In 2000, the 10th decile was earning 11x more than the 1st decile. By 2012, this multiplier has jumped to 20x!
Interestingly, there is a widening gap even within the top 20% households. The gap between the 9th decile and the 10th decile has increased from $12K to $14K in 2012.
Pardon my ignorance. Have I misunderstood the first chart in this post? I noticed a sharp increase in 2007 (red line). With government intervention the income gap is wider? Government taxes and transfers made the richer fatter and/or poor poorer?
I don’t think you read it wrong. In 2007, income inequality (blue line) widened, with the rise of GST from 5% to 7% on 1 July 2007 being a big contributor to this trend. Govt intervention was either reduced or less effective, such that even after including assistance to the low income, adjusted income inequality still deteriorated (thus the spike in the red line).
In the end, how many of those who falls below the poverty continue to vote for the PAP?How many can be enlightened and how? How many elites still continue to vote the PAP and hwy?
The said Minister argued “…. while other genuinely needy citizens outside the poverty line are excluded.”
You know what, we should ask that stupid PAP Minister what does he exactly mean by “genuinely needy citizens” in his above statement. For example, is he especially referring “other genuinely needy citizens ” to those eligible applicants with a limit of S$12,000 monthly salary to be eligible applying for EC apartments costing more than S$1million ?
Now if some family household can afford to own a million-dollar EC penthouse, why do they need any assistance from the Govt to own any home ?
The bullshit is out there for everyone to realise how talented our PAP Ministers are, isn’t it ?
To Chris, 28 Oct, 12:38
[Why no reply button?]
I don’t think Yawning Bread is disputing the strong possibility that some retirees and households with no working income, have other sources of income. I notice that he discussed this within the article, plus the mention of “asset rich, income poor” families.
What you’re asking him to do is to adjust his figures based on some assumption that some of this group have other sources of income.
While I don’t know what’s really in his mind, it’s a risky move to make, to tamper with the numbers. The problem may be that there is no data available, and making assumptions on the fly isn’t good science.
As to your suggestion that if we can’t determine how many of the “no working income” households have other sources of income, we should leave out this group from the total, it is no more convincing than Yawning Bread’s decision to add them in. In fact, since it is more likely than not that households with no income from work would not have any significant income from other activities, on balance it is better to add them in.
What may be pertinent is whether in HK’s statistics, they add them in or leave them out. Yawning Bread is trying to compare Sg with HK, and a deciding factor should be to correspond with the method used in HK.
Anon,
Replies do not nest very deep, hence the lack of such reply button.
Great that you are replying directly to my point! But as you said, making assumptions on the fly isn’t good science… using the basis that households with no work income, more likely than not, have no significant income at all, is an assumption in itself. It means you are saying “50% or more of those households are poor”. It may be true, it may be false… I simply would not have any data basis for leaning either way at this point.
I think your point is very valid on how HK counts those households. If they count the same way yawningbread does, then by all means, keep them in.
On the balance, I think leaving them out under-estimates the number of poor, while counting them as in this blog entry probably over-estimates them. The truth may be somewhere in between.
Singapore has become a playground for the rich. Check out the number of Ferraris and Lamborghinis on the road, according to LTA’s car population data – http://coewabunga.appspot.com/brands.html
Lien Foundation finds 20-22% below poverty line
http://blogs.wsj.com/searealtime/2013/11/11/in-singapore-calls-for-poverty-line-amid-rising-inequality/
“Another way to look at it is to consider the fact that in most other countries, people pay rent. In Singapore, they are more likely to pay a mortgage, but it still comes out of the monthly income, albeit that it mostly comes out of the CPF portion”
That to me is an extraordinary achievement when considering expenses vis-a-vis defining a poverty line!
Looking at your subject title, are you seriously suggesting that one in four households in Singapore are living in poverty??