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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?
At first glance, the golden number is $5,943. But is really 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.
Using labour force instead of total population will be more accurate since we are basing our calculation only on those who are working.
So what is the real “average” earner in Singapore?
The golden number is $9,207!
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, unless we have other source of income. This is normal, as income 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 there is potential to increase your wages in Singapore. 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.
The above write-up is an extract/abridged version of this original article:
Mr Personal Views
Looking at the income distribution, we can see that the there is a growing gap between the “normal” Singaporeans, and the high-income earners. But what is not included is many of the “side jobs” which provide normal Singaporeans a 2nd source of income, such as online businesses and trading income, which may not be reflected in GDP or income surveys.
One thing is certain though: Unless you are drawing a 5-figure salary from your job, it is going to be hard to live comfortably in Singapore without a 2nd source of income. And it is never too late to start. Good luck! 😀