DBS Latest Report Reveals Massive Drop In Customers’ Income, Especially For Lower-Income Workers

It’s no secret that the COVID-19 pandemic has had a huge hit on the working world.

Pay cuts, working from home and job losses are common stories you’ve heard within the last few months.

Looking at the statistics don’t help, either. In fact, looking at them would probably make your heart sink further.

More Scary Statistics

According to The New Paper, a DBS Bank report showed that their customers who reported a drop of more than 10% in their salaries jumped from 15% in Mar to 26% in May.

And in that latest reading, around a third had their salaries cut by half.

This report was gathered based on data from March to May and across 1.2 million retail customers.

These people were aged between 25 and 70, and they used DBS as their main bank for crediting salaries.

On 18 August, DBS Group Research senior economist Irvin Seah said that even if some jobs have been saved by government policies, impact to income has already spread.

There are companies out there which go for a “softer” approach, using methods like no-pay leave, mandatory leave and pay cuts instead of retrenchments.

Two Groups Are More Vulnerable

Namely, the middle-aged workers and lower-income workers.

More than half of those aged between 35 and 44 had their salaries cut by 30 per cent.

It is likely because this age group has less support than the older workers.

According to Mr Seah, middle-age workers face competition from younger colleagues and their higher wages makes them more vulnerable to pay cuts.

Lower-income workers, not to be confused with Singapore’s definition of low-income, are workers who earn S$2,999 or lesser.

About half of them had their income drop by a whole 50 per cent.

Not Enough For Emergencies

To make matters worse, the report showed that a lot of these affected workers did not have adequate savings to last.

64% of those who had experienced a significant fall in income has lesser than 3 months worth of emergency funds.

And out of this 64%, about 4 in every ten individuals have less than one month worth of emergency savings set aside.

While many Singaporeans understand the need for saving, many couldn’t save because of planned and unplanned expenses that could eat into what was once a sufficient amount set aside for emergency savings.

The recommended amount to save is typically 10% per month.

This could potentially widen the income gap in Singapore, Mr Seah says.