Inequalities & Income – Singapore Opportunity
For the first time in years Singapore’s rate on the Gini coefficient [a measure of income inequality – a Gini coefficient above 0.4 usually signals a large income gap] fell to 0.398 in 2019. This is significant as Singapore’s Gini coefficient in 2018 measured at 0.458. This drop came after the government’s pledge to make tackling social inequality a key priority. Steps to boost low-wage workers’ incomes have picked up speed, with the National Wages Council recommending higher wage thresholds for a broader range of workers.
ComCare assistance, established in 2005, aimed at providing social assistance for low-income individuals and families. In 2019, it was reported that the disbursement of ComCare rose by 19%, up to S$151 million. In 2020, the Ministry of Social and Family Development (MSF) automatically extended the ComCare assistance for about 6,000 existing beneficiaries. This decision was made in response to the economic and health impacts that the Covid-19 pandemic had had on the lower-income and vulnerable members of society. A latest initiative launched in 2019, ComLink, was set up to provide a centralised hub for support and resources for low-income households. The initiative has been projected to expand its reach to 21 new towns and 14,000 families in the next two years. These actions not only show an increase in financial commitment and support from the government, but a greater effort in building the infrastructure to directly provide more comprehensive assistance to low-income households.
Although the Progressive Wage Model (PWM) has come under some criticism over its slow implementation, it is undeniable that this programme has helped to grow the annual median income of low-income earners. Since its introduction in 2012, the average annual increase in salaries of the three lowest-paid occupational categories (service and sales workers, plant and machine operators, cleaners, labourers and related workers) was 3.4%. Therefore, the announcement of an extension of the PWM to include two more sectors in the advent of the pandemic has become more of an overdue necessity, given the continued wage lag in other low-skilled sectors.