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Saturday, September 19, 2009

In millionaire-rich Singapore, majority income below national average

Nowhere in the world are you more likely to run into a millionaire than in Singapore. But the great majority of households in the city-state earn less than Singapore’s average household income.

How can the majority earn less than the average? Is it because some are very rich?

Singapore had the highest concentration of millionaires last year, with 8.5 percent of the country’s households owning more than $1 million, reports the Boston Consulting Group. Switzerland was second, with 6.6 percent, followed by Kuwait, 5.1 percent, United Arab Emirates, 4.5 percent, and the United States, 3.5 percent.

With such a profusion of millionaires, of course, Singapore is rich, very rich.

Last year, the average monthly household income was 7,090 Singapore dollars (about $5010) for resident households and 7,750 Singapore dollars for employed households, according to a paper published by the Singapore Department of Statistics. Resident households denote Singaporeans and permanent residents and employed households are those where at one least one member is employed.

Incomes were increasing, said the same paper, pointing out:

“In 2007, 33 percent of employed households earned a monthly income of at least 7,000 Singapore dollars. In 2008, 39 percent of employed households earned a monthly income of at least 7,000 Singapore dollars.”

But that means 61 percent – or the great majority – earned less than the average household income.

Indeed, the median income – the income of half the households – was considerably less.

The median monthly household income, according to the same paper, was 4,950 Singapore dollars for resident households and 5,480 Singapore dollars for employed households.

The paper explained: “The median household income refers to the income in the middle of the income distribution, that is, half of the households have higher income than the median household income and half have lower income than the median household income.”

Still, things were looking up, said the paper.

The income gap last year narrowed for the first time since 1998, it said: The Gini coefficient dropped from 0.489 in 2007 to 0.481 in 2008. “This decline reflects the faster income growth among the 21st to the 90th percentile of employed households,” it added.

But the highest income group earned more than 17 times as much as the lowest income group. See these figures taken from the paper.

Average monthly household income from work among employed households
Decile 2007
Singapore dollars 2008
Singapore dollars
1st to 10th 1,220 1,310
11th to 20th 2,240 2,480
21st to 30th 3,040 3,430
31st to 40th 3,970 4,430
41st to 50th 4,900 5,460
51st to 60th 5,880 6,730
61st to 70th 7,140 8,040
71st to 80th 8,730 9,720
81st to 90th 11,330 12,910
91st to 100th 20,440 23,020

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