FAMILIES in Singapore were better off last year despite the rise in inflation, according to official figures.

Even the lower-income enjoyed greater spending power as wages rose amid a tight labour market.

At the same time, the income gap narrowed, due to government transfers to the needy and taxes on higher-income earners.

This income snapshot is part of a review of the nation’s health, education, manpower, housing and other policy areas in the past two years.

Released yesterday, the Singapore Public Sector Outcomes Review painted a generally positive picture of the desired outcomes it evaluated. One outcome is that income is growing and social security is strengthening.

After taking inflation into account, the real median monthly income per household member rose from $1,799 in 2010 to $1,848 last year. This means half of them earned more than $1,848. These sums are in 2009 dollars.

Earlier government figures, however, showed that the median monthly income per household member was $1,994 last year because inflation had not been taken into account.

This means real income rose by 2.7 per cent, as was reported earlier this year. The rise is seen in both middle- and lower-income households.

The real monthly income per household member at the 20th percentile – marking the bottom fifth – grew by 2.8 per cent a year from 2006 to last year.

Two factors pushed household incomes up, said the report.

One is individual wages have risen. The other is there are more working people per household.

Analysts like Barclays economist Joey Chew attributed the income rise to a labour market hungry for workers, forcing employers to pay more to entice them.

This demand, in turn, is attracting more people to enter the workforce, she added.

On income inequality, an issue that has caused unhappiness in some quarters, the Gini coefficient showed little change last year. It was 0.473 compared to 0.472 in 2010.

This measure of income inequality ranges from 0 to 1: the higher it is, the more unequal.

But when government transfers and taxes were factored in, the Gini coefficient dropped to 0.452 last year, from 0.455 in 2010.

Singapore Management University assistant law professor Eugene Tan said the “rather celebratory” report could have made more explicit comparisons with the 2010 report. “It could also look closer at the not-so-good outcomes, so that it doesn’t come across as a feel-good report.”

The report also sketched how Singapore fared in other areas.

Economic growth is subdued but foreign direct investment is growing. Singaporeans are becoming more educated and living longer and healthier lives. More are enjoying sports and the arts. But as public transport journeys rise, putting a strain on infrastructure, customer satisfaction has fallen.

The full report is on the Finance Ministry’s website, www.mof.gov.sg