Household Incomes Drop In Pandemic Hit Singapore

2020 was a year when Singapore and the rest of the world struggled to keep their economies afloat and to sustain their peoples’ livelihoods amidst the various unprecedent challenges. It saw the Singapore government’s largest budget of close to S$100 billion, which was disbursed through five support packages to aid Singaporeans and local businesses during this trying period. To find out more about the five support packages offered by the Singapore government in 2020, you may sign up for economics tuition Singapore with a reputable economics tutor Singapore. However, despite the steadfast government support, Singapore economy plunged by 5.8 per cent for the full year of 2020, sending the financial hub into its worst recession since independence.

Impact On Household Incomes

A two-month circuit breaker to contain the spread of coronavirus derailed businesses across all sectors. Except for those offering essential services such as supermarkets and F&B outlets, businesses were shut down and the island city was sent into a near standstill. The phased re-opening since early June 2020 has allowed gradual recovery of local businesses. However, it will not be business as usual for majority of them. The disruption was especially excruciating for those in the tourism and related sectors. With guidance from your economics tutor Singapore in your economics tuition Singapore class, discuss how the tourism sector was impacted by the Covid-19 pandemic. As a result, unemployment rate reached 4.38 per cent, the highest in the past 10 years. 11,350 workers were retrenched in the first half of 2020 and many more were put on long term unpaid leaves. You may consult your economics tutor Singapore in economics tuition Singapore about the various economic implications of a high unemployment rate in Singapore.

The negative impact on household incomes was inevitable. According to the Singapore Department of Statistics, the median monthly household income from work fell by $236, or 2.5 per cent to S$9,189 in 2020, from the year before. As for each household member, the median monthly income from work fell to S$2,886 in 2020, from S$2,925 in 2019. In consultation with your economic tutor Singapore in your economics tuition Singapore class, analyse the trend in local household incomes over the past five years.

Income Gap Narrowed As A Result Of Government Transfers

The decline in household income from work was consistent across different income groups. However, it is important to note that Singaporeans in the lowest income group (bottom 10 per cent) suffered the most severe income decline of 6.1 per cent during the pandemic hit 2020. This is in stark contrast with the income declines of between 1.4 and 3.2 per cent for households in the top 90 per cent income group. You may approach your economics tutor Singapore in economics tuition Singapore for an explanation. Interestingly, income gap in Singapore did not widen but narrowed. This was made possible by the various government transfers, most of which were targeted at low-income households.

The Gini coefficient which is widely used to measure income inequality was 0.375 in 2020, the lowest in Singapore’s history, after taking into consideration government transfers. Edmund Quek is the best economics tutor Singapore. You may learn more about Gini coefficient and government transfers in his economics tuition Singapore. The economics tutor Singapore is the founder and principal economics tutor of Economics Cafe Learning Centre, which is widely regarded as the best economics tuition Singapore centre. A typical household living in a 1- or 2-room HDB flat received an average of S$13,670 per household member in government transfers in 2020, almost four times the amount received by a typical household member living in a private property.

Benjamin Tay

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