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Saturday, March 6, 2010

Singapore estimated median hourly wage

A friend sent me a link to this article that was originally published by Business Times (Read here).
Published March 4, 2010

Halimah pokes holes in UBS study
Assumptions lead to underestimation of average wages here

LABOUR leader Halimah Yacob yesterday rejected a UBS study that concluded that wages and purchasing power in Singapore are lower than those in Dubai, Seoul, Hong Kong and Taipei.

'After taking inflation into account, real wages still grew 10 per cent over three years.'
- Mdm Halimah
The UBS Price and Earnings survey, which has been making the rounds on the Internet, ranks Singapore a lowly 50th out of 73 cities in terms of the average worker's buying power - about the same level as Kuala Lumpur - and 40th in terms of gross wages.

The findings were singled out by Inderjit Singh (Ang Mo Kio GRC) in Parliament on Tuesday, as debate kicked off on the Budget. Mr Singh cited them to argue that despite Singapore's high GDP per capita, its workers are not doing that well - and 'the wage divide is high enough to distort the per capita figures towards the higher extreme'.

Responding to Mr Singh, Mdm Halimah, who is MP for Jurong GRC and deputy secretary-general of the National Trades Union Congress, said: 'If the UBS's figures are to be believed, the average Singaporean experienced an 8 per cent drop in gross wages, from $11.85 an hour to $10.85 an hour between 2006 and 2009.'

She said that this not only goes against Singapore's official data but what is actually known on the ground among workers.

'The median wage per hour for our workers rose by around 20 per cent over the period,' Mdm Halimah said, citing figures from the Singapore Labour Force Survey.

'This is in spite of the effects of the recession last year, which reduced wages,' she said. 'After taking inflation into account, real wages still grew 10 per cent over three years.'

Mdm Halimah faulted the limited sample of firms in the UBS study.

'The study in fact acknowledges the uncertainty of its wage data,' she said. 'It notes that its figures do not represent statistical averages, as collection of data was limited to just a few companies for each profession and city.'

The study also had to make some simplifying assumptions because it covered 73 cities with very different work forces and consumption habits.

'Unfortunately, some of these assumptions lead to a single underestimation of average Singapore wages, as well as their purchasing power,' Mdm Halimah said.

She said that the UBS study gave much smaller weight to professional, managerial, executive and technical (PMET) jobs, which did not reflect the reality in Singapore.

Such jobs account for only 9 per cent of the work force in the study, which might be true for many Third World cities but not Singapore, where 52 per cent of workers are in PMET jobs.

'In fact, using the data published in the Report on Labour Force, the median hourly wage in Singapore is estimated at about $14 an hour, or about 30 per cent higher than the figure used in the UBS study,' said Mdm Halimah.

In calculating net wages, the UBS study also excluded CPF contributions, which most Singaporeans use to pay for homes.

Mdm Halimah said that after taking into account the use of CPF savings for home payments, Singapore workers have much more to spend out of their income on other goods and services.

'The UBS figures (further) assume a 'Western European' consumption basket in calculating price levels,' she said. 'It means including items like veal, steak, frozen pizza and wine, which are expensive but are not normally part of the average Singaporean's consumption basket.

'It also includes items such as 'dinner in a good restaurant' and tickets to an evening performance in classical theatre.'

There is this chart that may explain this $14 per hour rate (Source)

PayScale Singapore - Singapore Country Wages, Hourly Wage Rate

Taken on 6 Mar 2010 (11.10am)

Some jobs cannot be justified by hourly rate

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