Are the numbers telling you the whole story?
Reading channelnewsasia this morning, I saw the following headline:
“Average income of low-wage workers up over past two years”
Ever sceptical of Singapore’s news - they do have the lowest press freedom index (144th out of 173), I read on with curiosity
“In a progress report on low-wage workers, those who earned a monthly wage of S$1,200 in 2006 saw their salary go up to S$1,310 last year. “
Doing a little math
1310/1200 =1.09167 , an increase of roughly 9.17%
Wow, that’s great news right? However, they neglected to mention if this was a REAL or NOMINAL increase in wages. I’m assuming it’s nominal values, since they did not make even a squeak about inflation.
A quick pop over to Singapore’s national statistics website, and I managed to pull up the consumer price index (CPI) for 2006 to 2008 (how convenient!).
Scanning the PDF, I found that they even broke the CPI down into income groups. Comparing apples to apples, I took numbers from the “Lowest 20%” income group.
Rebasing CPI changes, using 2006 as base year (following the news article’s timeframe), I find that from 2006 to 2008, the CPI change for the lowest 20% income group was…
2006 to 2007 -> change of +2.0%
2007 to 2008 -> change of +7.4%
2006 to 2008 -> 100*1.02*1.074 = 109.548, or a change of +9.548%
So while CPI (an indicator of costs) has risen by 9.548% for the lowest income group, their wages have only increased by 9.17%. *Real* wages have actually decreased by 0.378%!
Now, I’m hardly one to shout about a 0.4% change (4cents per $1000), but the news report seems to imply that wages have increased by 9% without mentioning anything about inflationary costs, hence painting a rosier picture than it is in reality.
Hardly something to crow about is it?
