Forbes has named Singapore as the third richest country in the world. This wealth is measured using the Gross Domestic Product (GDP) per capita. Simplistically, it adds up everyone’s income for the year – to obtain GDP – before dividing it by the country’s population.
So how much should the “average” Singaporean be making based on this calculation?
Read More: Singapore, world’s richest. At what cost?
The golden number is $5,943!
At end-2014, Singapore’s GDP was recorded at SGD390.1 billion with population size of 5.47 million (Singapore residents + foreign talents).
Table 1: National Accounts and Population in Singapore
FY2011 FY2012 FY2013 FY2014 GDP(SGD mils) SGD 346,354 SGD 362,333 SGD 378,200 SGD 390,089 Population (mils) 5.18 5.31 5.40 5.47 GDP per Person SGD 66,816 SGD 68,205 SGD 70,048 SGD 71,318 Income per month SGD 5,568 SGD 5,684 SGD 5,837 SGD 5,943
Source: Singapore Department of Statistics
Since simplistic GDP means adding up everyone’s income for the year, we will also assume that CPF contributions are included into this number.
Add your gross salary (take home salary + CPF contribution) to your employer’s CPF contribution. If this number is not greater than SGD5,943, you are below the average amongst our population.
Is $5,943 the correct number as the average wage?
As mentioned, GDP per capita is a simple method to define how rich a country is by understanding how much everyone in the population earns per annum.
However, using the entire population is not a good gauge, as children, students and retirees are not working, and hence should be excluded from the calculation.
Table 2: National Accounts and Labour Force in Singapore
FY2011 FY2012 FY2013 FY2014 GDP (SGD mils) SGD 346,354 SGD 362,333 SGD 378,200 SGD 390,089 Labour Force (mils) 3.24 3.36 3.44 3.53 GDP per Worker SGD 106,995 SGD 107,779 SGD 109,824 SGD 110,482 Income per month SGD 8,916 SGD 8,982 SGD 9,152 SGD 9,207
Note: The labour force comprises of people who are working or seeking work Source: Comprehensive Labour Force Survey, Ministry of Manpower
Using labour force instead of total population will be more accurate since we are basing our calculation only on those who are working. In this case, average wages inclusive of CPF contribution would be SGD9,207 per month per person.
So what are your numbers telling me?
If you are like us, then this number may appear exceedingly high to you, perhaps even unattainable. Do not worry, you’re not alone.
The median salary in Singapore is SGD3,770. That means the majority of us are not earning the average. This is normal, as wages are usually skewed towards the higher income earners and thus medium hardly ever equates to mean.
What you should make out of this number is that you have the potential to increase your wages. Unlike poorer countries, where your future growth in earnings would be easily capped by the low potential in the country, we do not lack this in Singapore. There is money to be made, somewhere and somehow, in Singapore.
You just need to figure our where and how.
If you require upgrading and improvements, do check out skillsfuture to see how can our government help you achieve better productivity and higher wage growth.
Edited by A_korusawa, 15 June 2015 - 11:31 AM.