Yahoo Finance 3 Hard Truths About Poverty In Singapore
Poverty exists in Singapore. DollarsAndSense.sg takes a look at some tough statistics in our country.
Singapore is a country that offers equal opportunities to all, or at least, that’s what we are told. This is particularly important in a country that emphasizes on the importance of human talent, in the absence of any other natural resources.
Maximising the potential of every individual, both young and old, is critical to our continuous success. However, contrary to what the media sometimes like to paint, not everyone gets a fair opportunity to develop their potential. An example will be people living in poverty.
If you are unsure about what poverty means in Singapore, you are not alone. Our government has repeatedly rejected the idea of defining poverty in our nation.
However, just because the government chooses not to define poverty doesn’t mean it does not exist in Singapore. We can understand the extent of the problem in Singapore by taking a look at how poverty is typically defined.
How Is Poverty Defined?
There are two general definitions about poverty that the rest of the world takes. They are “absolute poverty” and “relative poverty”.
Absolute poverty is defined as the minimum requirements necessary for living in Singapore. This will include how much is needed for food, shelter, clothing and other basic necessities to survive in the country.
Relative poverty is the standard more commonly adopted in developed nations or cities such as Hong Kong and Singapore, should we have one. Relative poverty refers to how much is required for a certain household to afford the basic necessities to survive in life and also avoid “social exclusion”.
For example, while you can physically survive without the need to have a computer, handphone or Internet connection, you would be socially excluded without these items, and hence, unable to move up the career ladder.
Hard Truths About Poverty
1. 110,000 – 140,000 household falls under the basic living expenditure of $1250
The department of statistics measured the amount needed for basic living expenses to be at $1250 per month, per household. According to data published in 2011, 10 – 12% of household fall under this level.
$1250, or about $312 per person, is not a high amount and we doubt anyone will disagree on that.
More tellingly, what the statistics revealed is that about 440,000 to 560,000 (based on each household having 4 family members) are actually living within or below that amount.
With our busy and cushy day jobs and equally packed itinerary on weekends, it is entirely possible that these people living below the absolute poverty line are invisible to us.
But there is no running away from the statistics. There’s about 5 hundred thousand of them in our country.
2. $2500 – $3000 is what you need to avoid being socially excluded (i.e. be in relative poverty)
If you are surprised that the amount seemed unusually high, and perhaps even too close to your own personal circumstances for comfort, don’t be.
23 – 26% of Singapore households income fall under the upperband of $3000. This equates to about 1 to 1.1 million individuals, an extremely sizeable figure.
The figure of $3000 resonates well with commonly accepted approach of how most countries calculate relative poverty. This is usually based on taking a percentage of the medium income of household in the country. For example, in Hong Kong, the level is set at 50% of what the medium income is. That works out to be S$2,343. Anything below that can be considered as a household living in relative poverty.
In Singapore, the medium income of household in 2012 was $6000. If you follow the usual standards of how relative poverty is determined in Hong Kong, $3000 is right on the mark.
And to quote our co-founder who wrote an article on Singapore being the world richest back in 2012, this could very well include both you and I.
So yes, there may be many of us out there who are already, or are in danger of, falling under the category of being “socially excluded” and living in relative poverty.
3. People in the bottom 20 percentile spend more than they earn.
Another worrying trend that explains why it is difficult for family living in poverty to get out of the poverty cycle is that these families earn less than they spend.
The most recent indicators published by the Singapore Department of Statistics shows that the bottom 20 percentile of household spent a monthly average of $2,231. However, this same group only earns an average of $2,022, or a deficit of $209 per month.
This tells us a tough truth which is difficult to swallow. If the bottom percentile of our nation (and we are referring to easily more than 1 million people here) is spending more than they earn, when will they ever be in a position to get out of the poverty cycle? More importantly, with a gap of almost $1000 between what they earn and what is determined as necessary for themselves and their children to stay in touch with society and be given a fighting chance of success, where will the additional $1000 come from?
Share With Us Your Story
Are you a social worker who would like to share your insights with us? Or do you have a success story that you believe will paint a different situation than what we have put forward, and perhaps even, encourage the rest of Singapore?
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DollarsAndSense.sg is a website that aims to provide interesting, bite-sized financial articles which is relevant to the average Singaporean.
