Internationally, the notion that work should pay a living wage has a long history and broad appeal. A living wage is one that allows workers and their families a decent standard of living, relative to contemporary norms in their society. Major declarations by the United Nations and International Labour Organization affirm the importance of a living wage for eliminating hardship, ensuring social stability and securing workers’ freedom and dignity. Indeed, it is considered a basic right.
A living wage that households need in Singapore
Despite the persistence of low wages, policymakers in Singapore have been reluctant to consider setting a universal wage floor that allows a decent standard of living. In 2021, drawing on MIS research, we calculated a Singapore living wage based on the budgets that households require to meet basic needs. That figure has since been revised to reflect the latest MIS update.
Living wage for households in Singapore in 2022
| Monthly amounts, $ | Two children (below 2, 2–6 years old) | Two children (2–6, 7–12 years old) | Two children (7–12, 13–18 years old) |
|---|---|---|---|
| MIS budget | 6,324 | 6,451 | 6,693 |
| Household work income needed to reach MIS budget after taxes and transfers | 5,272 | 6,045 | 6,624 |
| Work income needed per working parent | 2,636 | 3,023 | 3,312 |
| Living wage (average)* | 2,990 |
This amount—$2,990 per month—provides a starting point and a reasonable target for considering a living wage for Singapore. In 2022, the actual median work income among all full-time workers was already $5,070 (including employer CPF), or 1.7 times of $2,990. Entry-level wages under the Progressive Wage Model, on the other hand, are 28% to 53% short, after including employer CPF contributions.
How the living wage is calculated
Although there are variations in the way living wages are calculated internationally, the core method has three steps:
- The first step is to define what standard of living the living wage should enable and what this will cost. Different approaches may vary in terms of how far they draw on experts or public consensus to establish the definition and costs.
For Singapore, the MIS definition and budgets similarly provide a suitable basis for establishing a living wage.
- The second step is to decide what types of households to take into account and the assumptions about their working patterns. In some instances, living wages are based on the needs of a few stylised, or the most common, household types. In other cases, calculations consider a wider range of household types and their distribution among the population. The assumed number of working persons in the household and their total work hours affect the amount of wages that each hour of work must generate in order to cover household costs. The lower the assumed amount of work, the higher the hourly wage rate needs to be.
For the living wage calculations, the study focused on households with two adults and two children in contiguous age bands because this is a typical household type in our society. In 2020, the average number of children born to Resident (i.e. citizen and permanent resident) “evermarried” women was 2.0. It is also an important household type because it comes close to the replacement-level fertility rate of 2.1 that is a major concern of national population policy.
Within this household configuration, costs vary depending on children’s ages. Assuming two children in contiguous age categories, the MIS budgets range from $5,224 (if the children are aged below 2 and 2–6 years old) to $7,688 (if they are aged 13–18 and 19–25 years old) per month. As the latter may be considered an outlier due to expensive university fees, only the other three possible household configurations with two children below 19 years old are considered.
- Finally, decisions must be made about what policies (i.e. taxes and benefits) to incorporate, how and how often to update these rates, and whether to allow variations across geographical regions that have different costs of living.
With an assumption that both parents are working full-time, we adjusted for the same range of taxes (i.e. on on income and property, according to the housing assumptions in this study) and benefits (i.e. all universal and the major means-tested schemes).
Useful resources
For more detail about the MIS findings, please see:
For information about living wages in other countries, please see:
- Global Living Wage Network
- Alberta Living Wage Network (Canada – Alberta)
- Living Wage for Families BC (Canada – British Columbia)
- Ontario Living Wage Network (Canada – Ontario)
- Living Wage NZ (New Zealand)
- Living Wage Foundation (the UK)
- Living Wage For US (the USA)
- Fair Wage Network (International)