Tuesday, September 01, 2009

Singaporeans are fed, up with progress!

According to a paper by Stephen J. Appold entitled Singaporean University Graduates in the New Century: Over-educated but Under-skilled?
dated 24 July 2004, the median monthly income in Singapore is supposed to look like this:


1980 1990 2000
Overall $441 $1,204 $2,382
University graduates $2,175 $3,857 $4,827


Does that look like progress? It depends on what you are measuring against. Say, one plate of fried kway teow moved from about $1 to $2 from 1980 to 2000. Since income more than doubled in the same period, if you measure your well being on the affordability of eating fried kway teow, congratulations, because Singapore is making fine progress!

But being a ungrateful young Singaporean blogger, I am supposed to be able to find fault in the most flawless government in the world, and I try not to disappoint.

My father bought a 4 room flat in 1980 for $28,000. He paid in cash. No loan, no CPF. Today, identical flats in the same block are selling for over $310,000, despite running down 29 years of the 99 years lease. That's an inflation of over 10 times in 29 years.

Using the 4 room flat affordability as inflation adjustment, the median income graduate in 2009, who would earn roughly $6000 according to Salary.sg, is equivalent to someone who earned $600 in 1980, better than the non-graduate in 1980, but nowhere close to the graduates in 1980.

Therefore, as far as certain items are concerned, much of the "progress" in recent years has more to do with young families ramping up debt levels to keep up with the appearance of "middle income" rather than actual income increases resulting in better affordability.

It is also no wonder that double graduate income families do not seem to feel more financially secure than single non-graduate income families in 1980.

But let's focus on the number of plates of kway teows we can eat instead of depressing things. Especially if you are a property owning baby boomer who earns more from property price appreciation than your salary. Or if you are a senior civil servant or cabinet minister, whose pay is very well adjusted for inflation.

Good luck to young Singaporeans who do not own property. If this trend continues, in a few years time, it would be a highfalutin' idea for fresh school leavers to own lease 3 room flats.

Majullah Singapura!

The title was shamelessly stolen from the Today article that got mrbrown in trouble.

4 comments:

  1. A more accurate title would be over-skilled but underutilized.
    Dun think FT is the problem though it is certainly not helping.
    IMHO, part stupid NS and ang moh tua-kee mentality.
    But mostly the lack of self confidence.

    ReplyDelete
  2. I agree with your analysis, epsecially the self confidence part.

    The blog post was not about graduates in Singapore, but rather about the declining wages when adjusted for property inflation. I used the paper only for the average pay over the years.

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    ReplyDelete