Sunday 23 August 2020

Earning more than $10,000? You are in a safer position - COVID-19 as anti-robinhood

I read an article on Today, which I also shared on my Facebook page on the income inequality widening. Based on DBS data collated from their retail customers which should be substantial as a huge number of individuals will credit their income into their DBS/POSB account showed that individuals earning less than $2,999 formed the largest group of people who had a pay cut by at least 10%.  

And within this group, half of them had their income halved meaning only 50% of their salary was being paid to them during this period. 

"In comparison, higher earners — those earning between S$7,000 and S$9,999 — were the least affected by income cuts making up 6 per cent while those who earn S$10,000 and more, made up just 8 per cent."

It is scary when you think about it, I do belong to those earning less than $2,999 and to see their pay cut and even halved, it is painful because the amount is not even huge to begin with meaning their income has reduced even though it wasn't even high in the first place. 

$2,999 halved: $1499.50

$10,000 halved: $5000 

Surviving on $1499.50 versus $5000 is a huge difference but definitely, their original pay already has a difference. Imagine surviving just fine on $2,999 and now you earn $1499.50 due to a pay cut, maybe just a sickness or one big expenses can set you back into debt if you have no savings. This is why it is so important to control your spending and ensure that you are not spending beyond your means. 

The study also looked at the amount of savings that different income groups have. Definitely, individuals earning less had lesser savings, this could be very much due to their income as a lower income means saving is much more difficult as a longer time horizon will be required.

Covid-19 has been widening the income gap between the rich and poor as the rich get richer (Elon Musk and Jeff Bezos) and the poor loses their jobs and struggle to bring food to their table as the virus wreck havoc on their daily lives. I overheard one day while watching television that the Covid-19 is like anti-robin hood. 

Robin hood steals from the rich to give to the poor and so anti Robin hood means otherwise. I do agree to this particular statement. Covid-19 has stripped the jobs of many, from food vendors to service crews mostly jobs that require interaction and entertainment as they are not able to work remotely. Considering the scale of the pandemic, these jobs will not be reinstated back soon and it just means that unemployment will be high for the sectors affected. 

Read more: No such thing as an iron rice bowl

Middle aged individuals are also affected more, those aged 35 to 44 years old. It is scary especially if you have a family to feed and mortgages to pay. Times are really different as this pandemic puts things into perspective, nothing is definite and change is really the only constant. It will be awhile before things can get back to normal and even so, memory of this pandemic will live on. 

It's everyone for themselves, improving and learning new things to enrich yourself will be the way to go. All the best to everyone!



  1. Yeah, this rich-gets-richer poor-gets-poorer phenomenon is global & not just in S'pore; most widely reported in the US due to their huge relatively free press.

    Back in April, most observers already had a gut feel of this, as higher-paid white collar executives were able to WFH with no or minimal pay cuts. While blue collar & those in service lines were put on no-pay leave which are turning into actual retrenchments or terminations now.

    For S'pore situation, I'm guessing that many of those getting 1/2 pay or big cuts are simply getting the Jobs Support Scheme amounts (50%-75% during the lockdown). Work permit foreigners were just getting the FW levy rebates ($750) from their employers during April & May.

    With the re-opening, companies here have much lesser handouts from govt. That's why you see many construction sites going back almost full steam in July. As for citizens & PRs, the JSS has been slashed drastically. If the companies cannot generate the revenue, the staff will have to be let go.

    This recession is not due to some underlying financial weakness or economic imbalance, but rather due to no-physical-contact enforcement. Businesses that don't rely on face-to-face are not affected in the short-term. But long-term will still be affected as large portion of people/customers do work in sectors that require moderate-to-high level of physical interactions.

    That's why S'pore govt also no choice, but to allow more & more sectors and companies to open. One strong way is the big slashing of JSS & FW levy rebates. Ambassadors & social-distancing enforcers aren't so strict as 3 months ago. ;)

  2. if no ceca there are much lesser grab delry n phv.
    that is the root of the problem,voters or pap faults ?