More relief, social protection needed for Singapore's low-wage earners: study

THE household incomes of Singapore's lower-income families fell by an average of 69 per cent amid the pandemic last year, a new study has found, and its researchers are calling for more financial relief and social protection for low-wage earners.

The study commissioned by local charity Beyond Social Services was conducted among 1,231 families that applied for the organisation's Covid-19 Family Assistance Fund between April and September last year.

Median monthly household income among these applicants fell from S$1,600 pre-Covid-19 to about S$500 after the pandemic hit, representing a 69 per cent decline.

Based on 2019 figures, the median monthly household income of these fund applicants was 17 per cent of the national medium. After the pandemic hit, this ratio dropped to just 5 per cent.

Median income per capita fell 74 per cent, from S$425 pre-pandemic, to S$113. Just over a third - that is, 35 per cent - of these applicants had their household incomes drop to zero.

This latest study reiterates past reports that low-income families bear the brunt of the pandemic.

The researchers noted: "While declines were significant overall, those already surviving on less experienced greater drops in income, signalling deepening income inequality."

Figures from the Department of Statistics released on Monday showed overall median household income from work falling by 2.5 per cent in nominal terms, from S$9,425 to S$9,189.

Taking inflation into account, this works out to a 2.4 per cent drop in real terms - the first such decline in more than 10 years, since the global financial crisis.

Lower income households were the hardest hit, with those in the bottom 10 per cent experiencing a 6.1 per cent real decline in income.

In 2009, median monthly household income from work fell by 1.5 per cent in nominal terms, or 2.4 per cent in real terms, after accounting for inflation.

The Beyond Social Services study highlighted that a majority of its fund applicants are engaged in low-paid and precarious jobs, primarily in the service industry. They either lost their jobs or had their wages reduced due to pay cuts, shortened work hours, or being asked to take unpaid leave.

Prior to the pandemic, many of these roles already came with high levels of job and income insecurity, and had few paid benefits.

Rent and mortgage, already an ongoing concern for these households, also added considerable financial strain. Rent as a percentage of household income more than doubled pre- and post- Covid-19, the study found.

Noting "stark inequalities" entrenched in the labour market, the team behind the study urges the authorities to strengthen employment rights and social protections for low-wage workers, such as by placing greater emphasis on paid sick leave and paid childcare leave.

Given that the government had in October 2020 announced a three-month, 50-per-cent rent rebate for those living in public rental flats, they called for these waivers to be extended and reduced more substantially to reflect the income declines.

The researchers also recommended debt-relief programmes as well as greater scrutiny of predatory credit schemes - including hire-purchase schemes - that may potentially create debt spirals.

The study's lead author, Stephanie Chok, said: "Recovery efforts need to pay heed to the differential impacts of this pandemic, so that our new normal does not replicate or further exacerbate inequalities for vulnerable communities."