Significant Progress for Low Wage Workers since 2006

• Benefits of Workfare seen with increase in wages
• Reduction in income inequality, Gini coefficient, its first decline in a decade

Since 2006, low wage workers have come a long way, with both wage increases as well as more job opportunities. The wages of the 20th percentile full-time employed resident increased from $1,200 a month in 2006 to $1,310 in 2008. In addition, the number of residents earning $1,200 or less has fallen from 360,000 in 2006 to below 300,000 in 2008. More people were working, especially from households living in smaller flat types. The monthly household income of those living in 3-room HDB flats or smaller also grew by over $300 from $1,910 to $2,220. Even after factoring for inflation, this translated to a 3.5% per annum increase in real terms.

Singapore has similarly seen a reduction in income disparity, reflected by the drop in the Gini coefficient from 0.489 in 2007 to 0.481 in 2008 – the first decline in a decade. The Gini coefficient is even lower at 0.462, after adjusting for government benefits and taxes. These are just some of the areas of progress made by low wage workers since the release of the recommendations by the Ministerial Committee on Low Wage Workers three years ago.

 

Please refer to Annex A for the Factsheet on the Ministerial Commitee of Low Wage Workers.

Progress Report of Ministerial Committee on Low Wage Workers

2.   The Committee worked on various initiatives which were grouped under six broad spokes. The key highlights of the Committee's report are summarised below:

Spoke 1 – Rewarding Work
•    Nearly $840 million Workfare Bonus and Workfare Income Supplement (WIS) has been disbursed for work done in 2006 to 2008;
•    More than 10,000 lower-income families received $144.3 million worth of Additional CPF Housing Grants (AHG), which served as an additional subsidy for lower-income families to offset the purchase price of a HDB flat;

Spoke 2 – Social Support to Enable Work
•    From 2006 to 2008, a total of $33.4 million was given to an average of over 3,600 families annually under the Work Support Programme, which helps low wage workers or jobseekers upgrade their skills and find better-paying jobs, by providing them with temporary financial, medical and educational assistance;

Spoke 3 – Higher Skills for Better Jobs
•    About 130,800 low-skilled workers received training under the Singapore Workforce Skills Qualifications (WSQ) framework; while 58,000 workers were trained through the Employability Skills System (ESS) from 2006 to 2008;

Spoke 4 – Expand Job Opportunities
•    The Job Re-Creation Programme (JRP) has helped more than 47,000 workers acquire better skills, better jobs and better pay, while gaining inroads in the security, landscape, environment and conservancy industries;

Spoke 5 – Hope for the Future
•    Over the three years, MOE's Financial Assistance Scheme has helped an average of 40,730 needy students per year with $25.1 million disbursed; while the Kindergarten Financial Assistance Scheme (KiFAS) and Centre-based Financial Assistance Scheme for Child Care (CFAC) have provided an average of over 11,200 children from low income families, per year, with some $41.6 million in fee subsidies;
•    Between 2006 and 2008, an additional 1,200 vulnerable, low income families were approved for assistance under the Home Ownership Plus Education (HOPE) Scheme, bringing the total number of families approved on HOPE to about 1,700 at end-2008.

Spoke 6 – Sharing in the Nation's Progress
•    The $2.5 billion Progress Package was disbursed to all Singaporeans in 2006, with more given out to lower-income groups; and
•    In 2008, the Government shared the Growth Dividends through a one-off $2 billion package and other household benefits, on top of the $4 billion GST offset package in 2007 that will be spread out over five years.

Please refer to Annex B for the Progress Report of Ministerial Committee on Low Wage Workers. 

3.   The Government has spent over $1.1 billion from 2006 to 2008 helping low wage Singaporeans . The Government will continue its efforts to help this group and refine schemes to provide them more targeted assistance. This includes a review of the WIS scheme in 2010 to ensure that it remains effective in encouraging work and providing financial assistance.