1. IntroductionDuring adialogue session with Prime Minister Lee Hsien Loong, young adults said thatthey were concerned with not being able to afford “basic goods”, namely a flatand a car. Professor Eugene Tan, a former Nominated Member of Parliament, said:”Singaporeans see Singapore as a wealthy country but feel like that they arenot very wealthy themselves.” The root of the speculation on Singaporeansviewing themselves as not wealthy at all comes from the rising costs of livingin Singapore. Despite the fact that Singapore is broadly known to be aluxurious first world country, Singapore citizens actually suffer more by workingharder to maintain their desired standards of living. This paper will be raisingawareness of rising cost of living in Singapore.
It covers the different typesof inflations that causes the problem and also the effects on Singaporecitizens like delaying of marriages, unhappiness in citizens and the specificgroup that receives the biggest impact from rising cost of living in Singapore. Page 22. InflationThe maincause of the rise in living costs would be inflation.
Singapore’s inflationrate had been known to be lower than the average inflation rates of tradingpartners. Inflation would ultimately have an impact on a long-run potentialgrowth due to its negative impact on Singapore’s ability to attract and retaininvestments and human capital. This, in turn, would increase the rising cost ofliving. An example of an inflation that happened to Singapore would be in areport from the Institute of Policy Studies, “Based on data from the EDB AnnualCensus of Manufacturing Activities (CMA) 2013, growth in total business costsin manufacturing from 2003–2012 have averaged 7.56% year-on-year, while growthin materials costs have averaged 7.77%, and growth in remuneration costs haveaveraged 4.
76%.” (Manu Bhaskaran, 2016) . 2.1. ConsumerInflation Consumer Inflation talks about pricesof final consumer goods and services going up. Inflation is commonly measuredby the increase in the Consumer Price Index (CPI). Over 6,500 brands and an arrayof goods and services which resident household frequently purchased are includedin the CPI.
Citizens usually suffer the most from consumer inflation as it affectstheir daily lives, increasing the costs of necessary purchases and services. Page 32.2. AssetInflationAsset Inflation talks about pricesof assets such as housing properties rising rapidly. Young aspiring adultswishing to purchase a home for their future family would be having a verydifficult time. Unlike the days in the 1990s, the apartments available forpurchase to the public is getting much more expensive and smaller. 2.
3. Businesscost InflationBusiness cost Inflation talks aboutthe costs of rentals and goods, labour costs and components rising sharply.High business costs would mean start-up businesses having a difficult time to develop.This would result in the reduction of the competition level favouring theincumbents. High business costs further reduce the chances for smaller firms toinvest in other businesses, increasing the need for government subsidies andgrants. Page 43. EffectsManypeople would be concerned with the effects of rising cost of living as itusually affects them in a noticeably way. However, lower to middle class groupswill feel greater impact as compared tohigher class groups from rising prices.
An example would be “Accordingto the Bureau of Labour Statistics, the median weekly earnings for full-timewage earners was $780 in the first quarter of 2014 – unchanged since last year,although the CPI has risen 2.1% since then.”(Ullman, 2015). While the rising inflation rate stacks higherthan the pay increasing rate, citizens would be expecting a huge hole in theirwallets as the increase of the cost of living is just about every aspect ofdaily life.
3.1. Lowerclass groupFor the majority of the households, the primary itemsresponsible for the higher cost of living are food, school , tuition andmedical costs. Lower class families would be hit especially hard by the rise inthe cost of living because the proportion of expenses spent on basic needs isthe biggest. Unlike middle and higher class groups, where they spend a biggerpercentage of their budget on goods and services. 3.2.
Delay inMarriageCitizensare delaying their marriage so that they would be able to save up enough tokeep up with the high cost of living in Singapore. Factors to consider whensaving up for a marriage includes the wedding reception, purchasing a home forthe family, renovation and children. Delaying marriages might ultimately lead to an ageing population which would thenlead Singapore into a slower economic growth from the lack of workforce.Page 5 3.
3. HappyIndexWith a rising costof living, Singaporeans will be working harder for that extra cash to keep withup their standards of living. Office workers might take up more overtime workjust to get that extra pay.
With longer hours of working and lesser time spentto enjoy their time, the happy index of Singaporeans has seen a decrease. 4. ConclusionThis paperhas given an overview of how the rising cost of living in Singapore is veryevident and would be a problem for the citizens of Singapore. Acknowledging theproblem will be the first step that the citizens and the government can take toensure that the problem will be controlled. In the near future, a solution thegovernment can consider on would be the reduction of transportation cost.
Sincethe workforce of Singapore relies so much on public transportations, so much asso that it would not be an exaggeration to say that it is similar to fresh airfor Singapore’s economy, a cut on the transportation costs will definitelyrelieve on the essential costs that citizens need to pay. This will in turn, allow Singapore to move a step closer tobuilding a jeopardy towards rising cost of living.