Singapore’s economy is growing — why aren’t all workers feeling it?

“The divergence becomes more of a concern if weakness in consumer facing sectors starts feeding into employment and wages, because these sectors are more labour intensive than some of the industries driving GDP growth,” he said.

Standard Chartered economists Edward Lee and Jonathan Koh said they would be cautious about applying the “broad label” of K-shaped growth on Singapore, instead describing it as “strong but relatively narrow and uneven”.

They also said households experience economic conditions mainly through job security, wages and purchasing power – rather than the aggregate GDP number, pointing to a distinction between output growth and employment growth.

“Strong trade-related GDP growth has yet to generate commensurate employment gains, suggesting that the external-sector upturn has so far been relatively job-light,” they said.

WILL A RISING AI TIDE LIFT ALL BOATS?

If left unchecked, uneven economic growth could lead to a “dual economy”, said Dr Tan Ern Ser, adjunct principal research fellow at the Institute of Policy Studies.

That means the economy would be split into two segments, one comprising knowledge workers who benefit from technological advancement and rising productivity, and one comprising low-skilled workers who face weaker wage growth and the threat of displacement.

“The two segments are separated by a gap, with low opportunities for movement from the disadvantaged to the advantaged segment,” he said.

Over time, income differences can lead to wealth inequality, especially if the segment aided by AI continues to flourish while the other segment experiences low wages or job loss.