1.   
Introduction

During a
dialogue session with Prime Minister Lee Hsien Loong, young adults said that
they were concerned with not being able to afford “basic goods”, namely a flat
and a car. Professor Eugene Tan, a former Nominated Member of Parliament, said:
“Singaporeans see Singapore as a wealthy country but feel like that they are
not very wealthy themselves.” The root of the speculation on Singaporeans
viewing themselves as not wealthy at all comes from the rising costs of living
in Singapore. Despite the fact that Singapore is broadly known to be a
luxurious first world country, Singapore citizens actually suffer more by working
harder to maintain their desired standards of living. This paper will be raising
awareness of rising cost of living in Singapore. It covers the different types
of inflations that causes the problem and also the effects on Singapore
citizens like delaying of marriages, unhappiness in citizens and the specific
group that receives the biggest impact from rising cost of living in Singapore.

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2.   
Inflation

The main
cause of the rise in living costs would be inflation. Singapore’s inflation
rate had been known to be lower than the average inflation rates of trading
partners. Inflation would ultimately have an impact on a long-run potential
growth due to its negative impact on Singapore’s ability to attract and retain
investments and human capital. This, in turn, would increase the rising cost of
living. An example of an inflation that happened to Singapore would be in a
report from the Institute of Policy Studies, “Based on data from the EDB Annual
Census of Manufacturing Activities (CMA) 2013, growth in total business costs
in manufacturing from 2003–2012 have averaged 7.56% year-on-year, while growth
in materials costs have averaged 7.77%, and growth in remuneration costs have
averaged 4.76%.” (Manu Bhaskaran, 2016) .

 

2.1.           
Consumer
Inflation

             Consumer Inflation talks about prices
of final consumer goods and services going up. Inflation is commonly measured
by the increase in the Consumer Price Index (CPI). Over 6,500 brands and an array
of goods and services which resident household frequently purchased are included
in the CPI. Citizens usually suffer the most from consumer inflation as it affects
their daily lives, increasing the costs of necessary purchases and services.

 

 

 

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2.2.       
Asset
Inflation

Asset Inflation talks about prices
of assets such as housing properties rising rapidly. Young aspiring adults
wishing to purchase a home for their future family would be having a very
difficult time. Unlike the days in the 1990s, the apartments available for
purchase to the public is getting much more expensive and smaller.

 

2.3.       
Business
cost Inflation

Business cost Inflation talks about
the 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 the
incumbents. High business costs further reduce the chances for smaller firms to
invest in other businesses, increasing the need for government subsidies and
grants.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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3.    Effects

Many
people would be concerned with the effects of rising cost of living as it
usually affects them in a noticeably way. However, lower to middle class groups
will feel  greater impact as compared to
higher class groups from rising prices. An example would be “According
to the Bureau of Labour Statistics, the median weekly earnings for full-time
wage 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 higher
than the pay increasing rate, citizens would be expecting a huge hole in their
wallets as the increase of the cost of living is just about every aspect of
daily life.

3.1.       
Lower
class group

For the majority of the households, the primary items
responsible for the higher cost of living are food, school , tuition and
medical costs. Lower class families would be hit especially hard by the rise in
the cost of living because the proportion of expenses spent on basic needs is
the biggest. Unlike middle and higher class groups, where they spend a bigger
percentage of their budget on goods and services.

 

3.2.       
Delay in
Marriage

Citizens
are delaying their marriage so that they would be able to save up enough to
keep up with the high cost of living in Singapore. Factors to consider when
saving up for a marriage includes the wedding reception, purchasing a home for
the family, renovation and children. Delaying 
marriages might ultimately lead to an ageing population which would then
lead Singapore into a slower economic growth from the lack of workforce.

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3.3.       
Happy
Index

With a rising cost
of living, Singaporeans will be working harder for that extra cash to keep with
up their standards of living. Office workers might take up more overtime work
just to get that extra pay. With longer hours of working and lesser time spent
to enjoy their time, the happy index of Singaporeans has seen a decrease.

 

4.   
Conclusion

This paper
has given an overview of how the rising cost of living in Singapore is very
evident and would be a problem for the citizens of Singapore. Acknowledging the
problem will be the first step that the citizens and the government can take to
ensure that the problem will be controlled. In the near future, a solution the
government can consider on would be the reduction of transportation cost. Since
the workforce of Singapore relies so much on public transportations, so much as
so that it would not be an exaggeration to say that it is similar to fresh air
for Singapore’s economy, a cut on the transportation costs will definitely
relieve on the essential costs that citizens need to pay. This will in turn, allow Singapore to move a step closer to
building a jeopardy towards rising cost of living.

   

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