Standard of living refers to the economic and social well-being of individuals within a

country within a given period of time, and this includes both material and non-material
aspects. Material standard of living can be seen in the increase of real incomes that
would increase the purchasing power of consumers, and is characterised by the ability
to consume goods and services. Non-material standard of living is more qualitative, and
refers to the improvements in quality of life and the environment. While the given
information does have some bearing on the material standard of living, it is insufficient
to give a holistic assessment of Singapore’s standard of living, so it can only, to a small
extent, lead us to the conclusion of a rising standard of living in Singapore.

Real GDP refers to the monetary value of all final goods and services produced within a
country during a given period of time, with inflation factored out. Nominal GDP does not
have inflation factored out, so real GDP is more useful. With a higher real GDP,
assuming that the population remains constant, consumers have higher incomes which
would increase their purchasing power. When they purchase more goods and services,
there is a higher level of consumption, which necessarily correlates to higher material
standard of living.

However, there are assumptions of the real GDP data which need not necessarily hold.
It is assumed that the population is constant, which is not the case. If the population
increases more than proportionately to the real GDP, the average income of a
consumer would actually decrease, so consumers would have lower purchasing power.
Nonetheless, in the context of Singapore, it is unlikely that the population would
increase too much as it is a small country, so the real GDP data can still be accurate.
Perhaps, a better measurement would be real GDP per capita.

Real GDP data is also limited because it does not account for equity. When the real
GDP increases, it is possible that only the incomes of the rich have increased
significantly, and the poor do not have an increase in income. Since the rich only
constitutes a small minority within the economy, it is inconclusive that the material
standard of living in Singapore has actually increased. This is especially relevant to
Singapore since the country has one of the highest Gini coefficients for developed
countries.

Real GDP can increase from various sources, which need not necessarily arise from
consumption, so it may not correspond to a higher material standard of living. It is
possible that GDP has increased becaues firms have increased investments and
stocked up capital goods, which would increase the productive capacity and hence
increase the standard of living in the future, but presently, there is no higher
consumption of goods. GDP can also rise from higher exports: the goods and services
are sent out of the economy, and is not enjoyed by the consumers within the economy.
Hence, the material standard of living may not rise with higher GDP.

With more jobs created, it is likely that unemployment would fall. When there are more
jobs, some people who are able to fulfil the requirements of the jobs can take up the
jobs. This would give them an income, which increases their purchasing power, and
hence allow consumption that increases the material standard of living. Furthermore,
with higher employment, the government can also have higher personal income taxes.
This increases the government budget which can be spent on infrastructure and
education. This leads to higher quality infrastructure and higher quality education, which
increases the non-material standard of living within the economy.

The fact that jobs are created need not necessarily correspond to lower unemployment.
Jobs being created does not mean that they are necessarily taken up. For example, if
ASTAR has a job for a biologist, and the unemployed labour force consists mostly of
unskilled workers, then such job vacancies cannot be filled, which restricts the increase
in employment. There could also be jobs like being a worker at a construction site –
Singaporeans are unwilling to take up such jobs, so they remain unemployed. Instead,
there are foreign workers who take up the jobs. With unemployed Singaporeans, their
material standard of living cannot improve. Therefore, the creation of jobs does not
necessarily correspond to a higher material standard of living.
A high inflation appears dismal for Singapore, which may suggest a lower standard of
living. When inflation is high, the amount of goods and services that can be purchased
with the same amount of money decreases, thus leading to a lower material standard of
living.

However, the high inflation is irrelevant to the situation because the overall consumer
income has still risen due the increase in real GDP that has already factored out
inflation. This results in the increase in the ability of consumers to purchase goods and
services.

Nonetheless, the poorer people would be hardest hit. The increase in real GDP is
enjoyed mostly by the richer lot, but inflation affects everyone. This means that the poor
majority in society would not have an increase in income, yet they face higher prices.
This leads to lower purchasing power, and hence lower consumption that leads to a
lower standard of living. Given this information, it is likely that standard of living in
Singapore has not increased.

Thus far, the primary concern has been material standard of living, but the given factors
have failed to consider the non-material standard of living, since the qualitative aspects
of life are not given in the preamble. In fact, the optimistic economy might result in a
lower standard of living. The GDP increase can be caused by higher employment of
manpower, which leads to longer working hours. This causes individuals to have less
leisure time, thus decreasing their non-material standard of living. Furthermore, a higher
GDP hints a higher production within the economy. This results in higher employment of
factor inputs like electricity, which necessitates burning of more fossil fuels, thus
polluting the environment. With the absence of clean air, the non-material quality of
living has fallen. Therefore, in the non-material aspect, there has not been a rise in the
standard of living, given the information.

In conclusion, the given information is helpful to some extent in showing how the
standard of living has increased due to higher employment and consumption. However,
the information is inherently limited, and overlooks the qualitative parts of living.
Perhaps, supplementary indicators should be used, like the Human Development Index
(HDI), which also accounts for the cost of living, literacy rate, and life expectancy. If the
HDI increases with the GDP, then it is more likely that the standard of living has
increased. Therefore, from the given information, we can only, to a small extent,
conclude that there is a rising standard of living in Singapore.