The Social Impact and Effect of Income Inequality in Singapore - Thesis Example

The paper "The Social Impact and Effect of Income Inequality in Singapore" is a great example of a macro & microeconomics thesis. This is the opening chapter of the dissertation. As such, the chapter builds up the background for the study and introduces the fundamental issues and matters being studied in this research. As a prelude, this chapter will provide the basis of the variables of the research in normal life. This will lead to the formulation of the research aims and objectives and also provide an insight into what will be done in the rest of the research.

BackgroundIn February 2013, the local Singaporean and international media carried out extensive coverage of the high levels of inequality in Singapore. According to Yahoo Finance, the median household income of 2011/12 in Singapore increased by 2.7% after factoring in inflation in the period and the quantum of the increase implies that the richer people in the society got richer whilst the changes caused marginal growth in the income of the poor (Salimat, 2013).Median household incomes in Singapore increased by 7.

5% but the impact of inflation caused the increase to dwindle to just 2.7% (Salimat, 2013). The Gini coefficient used to measure income inequalities showed that Singapore’s coefficient was 0.478 between 2011 and 2012 (Yi Ling, 2013). This was the highest in the OECD group of countries in the developed world. This shows that there is a high rate of income inequalities and a wealth gap between the rich and the poor. The income gap is viewed to be one that is steeped in the rising cost of living that came with the economic boom of Singapore between 2007 and 2011 (Yern, 2011).

According to other sources, the economic boom in Singapore has led to a trend whereby affluent investors have moved into the country with foreign workers, hence there is a general reduction in the job placement positions for poor Singaporean low-class citizens (Drew, 2013). This implies that the poorer people of Singapore are bearing the brunt of the economic boom and internationalisation of the country. Other quarters indicate that the low tax rate of 20% in Singapore has attracted foreign investors and this has made Singapore one of the world’s richest cities (Drew, 2013).