30 per cent income rise for average Singaporeans over next 10 years
19 Jul 2010Date: 19 July 2010
Parliamentary Question for Oral Answer converted to Written Answer by Mdm Ho Geok Choo:
To ask the Minister for Finance whether he will elaborate on his recent statement of a Singapore being an economy with top quality skills that will raise incomes for average Singaporeans by 30% in the next 10 years, from a median wage of $2,400 to $3,100.
Reply by Finance Minister Tharman Shanmugaratnam:
1. The recent statement that Singapore should work towards an increase in the median wage by 30% in real terms over the next 10 years, reflects the goal of growing productivity by about the same quantum over the period.
2. A sustained and broad-based rise in wages can only be achieved if we grow overall productivity. The Government had adopted the goal of growing productivity by 2 to 3 % per year over the next decade, or about 30% cumulatively, following the recommendations of the Economic Strategies Committee.
3. As discussed in Parliament during the Budget debate, 2 to 3% productivity growth is more than double the 1% growth Singapore achieved in the last 10 years, and is also a major challenge for any economy at our level of development. It can only be achieved through the concerted efforts of employers, workers and Government - to upgrade skills and re-design jobs, seek new opportunities for companies to grow, and restructure the economy. The Government's strong support for this shift in the economy was set out in the Budget.
4. By working towards a significant increase in the median wage, ie for the 50th percentile, we are focusing on a broad-based increase in incomes and standards of living of Singaporeans - not just those in the higher income brackets. This is also why the measures we are undertaking to raise skills and productivity are targeted at every segment of the workforce.
5. The median wage in 2009 was $2,420 per month. Achieving 30% growth in wages discounted for inflation, will take this to about $3,100 in 10 years. Including inflation, assumed at 2% per year, the median wage in nominal terms would reach about $3,800.
6. This will imply significantly higher growth of median wages compared to the last decade. The median wage grew by 1.4% per year in real terms over the last 10 years (1999 to 2009), or by a cumulative 15% over the period (discounted for inflation).