Households without wealth can get ‘completely disabled’ by disruption, job loss: IPS’ Mathew Mathews

SPEAKER_1 (0:02)

This is a podcast by The Straits Times.

Lynda Hong (0:09)

Hello, I'm Lynda Hong, Assistant Podcast Editor at The Straits Times. In Singapore, the average wealth held by the top 20% of households is at $5.3 million per household. That's 18 times more than what a household in the bottom 20% owns. But what does this mean for Singapore's social mobility and the inequalities we've been working to even out? We'll unpack this in this episode of In Your Opinion with my guest, Mathew Mathews.

He heads the Institute of Policy Studies Social Lab at the National University of Singapore. Mathew, welcome to the show.

Mathew Mathews (0:46)

Nice to be here.

Lynda Hong (0:47)

Now, Mathew, this difference in the average wealth held by the top and the bottom households comes from an occasional paper from the Ministry of Finance or MOF in 2026 There was a similar one published in 2015

But in that report, the wealth inequality only mentioned how some might have low income, but high wealth due to their ownership in property. Now, this time around, a statistic was published, The Gap Between the Rich and the Poor, known as Singapore's Gini Wealth Coefficient, which is at 0.55. In your opinion, why is there now more focus on wealth inequality?

Mathew Mathews (1:25)

Of course, the fact that the occasional paper mentioned wealth inequality is probably an indication that the one we have more data today and so agencies are able to pull some of that data and show us what the disparity in terms of wealth is between the top and the bottom. But internationally, there has been a lot more interest in that. I think one is because we notice where the concentration of wealth is, and that's not always the same as the concentration of income. So you have places where you have a lot more wealth, individuals who have a lot more wealth.

Of course, then from there, you notice that it's a small group of people who have a substantial amount of wealth. I think that always raises that issue about, is there sufficient mobility in society? Because wealth is something that you, it's like a stock that you have.

Income, you can get little bits of it over time. But wealth, you hold that, and wealth provides something which income doesn't. It provides this buffer. So when individuals have that wealth, they're able to buffer something, they're able to, of course, make sure that's passed on from generation to generation. So it seems to raise those questions about whether we really are in this fair society.

Lynda Hong (2:39)

Do you see that there's inequality wealth gap widening?

Mathew Mathews (2:44)

The occasional paper Dean give us that information, partly because there was no previous attempt to calculate wealth inequality. So what we have is 0.55 is what we have now. It will take a few years for us. So, I mean, if they do these studies regularly, we'll be able to see whether we're seeing a widening wealth gap. Income inequality, if you look at it, has come down, particularly when you have increased wages among the bottom.

You see that having increased over the years. And also, when you add the fact that there are quite a few government transfers, that makes a big difference in terms of income inequality. But wealth inequality, I don't think we have enough data on that to be able to really see whether we have had some increase in that.

Lynda Hong (3:33)

But socially speaking, we are looking, we're starting to monitor this now. What is your opinion about, you know, what are some of the immediate social implications going forward?

Mathew Mathews (3:44)

When we start thinking about wealth inequality, one of the big issues is what are you able to hold that would allow you to buffer the difficult seasons?

You know, people may have the same income, family would have, you know, if you have 5,000, another family has 5,000, but a family which has, also has quite a bit of wealth. They have lots of savings, they've got stocks and shares, they have properties, for instance. It's in a very different situation, even when both of them perhaps lose their jobs. Because one can use whatever else you have, the savings you have accumulated, the stocks, the assets, even the property sometimes you can, can make that liquid at some points, you can sell it. And that would allow you to go through some of the economic shocks. And I think increasingly with all our concerns about what we have with AI and technology, and the fact that job loss is going to increase, clearly would remind us that some of us may not be prepared for that kind of job loss. I mean, especially if you think about individuals who are on the lower part of the income ladder, and very often don't have that kind of wealth.