Is Purchasing Power in Singapore low?
There are regular claims that Singaporeans have lower purchasing power relative to people in other comparable places. Such claims cite surveys, such as the UBS Price and Earnings Report 2011.
When looking at such reports, we need to also look at the assumptions and methods they use. For example, with regard to the UBS report:
It understated wages in Singapore. It assumed a set of common occupations across the world, thereby understating the proportion of higher skilled occupations in Singapore. In particular, Professionals, Managers, Executives and Technicians (PMETs) were under-represented. The study assumed that Singapore had only 9% PMETs but in actual fact, our resident employed workforce is made up of 52% of PMETs. And because PMETs command higher wages, assuming a smaller pool of PMETs in Singapore resulted in the wages for Singaporean workers being understated.
It overstated the cost of living for the typical local household. The study assumed a basket of goods (types of food and drinks, etc) representative of a family in Europe, but not of a local resident household. European consumption goods are likely to be more expensive in Singapore.
A more detailed analysis of the UBS report can be found at:
Some other international reports with a similar expatriate focus are the EIU Cost of Living survey and Mercer report.
A study by the Asian Competitiveness Institute used extensive international estimates and data by the World Bank and International Labour Organization to compare purchasing power in different cities. It found that the cost of living was high for expatriates as compared to other cities, but not for Singapore residents.
The Institute also calculated the purchasing power of average wages based on a local residents cost of living and found that an average worker here has 34 per cent more purchasing power than one in New York. This is in contrast with the UBS report, where our purchasing power was only 33% that of New York's.
More details on this study are available at:
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