INTERNATIONAL – Wages growth in Singapore in 2023 stood at 0.4 percent after adjusting for inflation, maintaining the same rate as the previous year, according to the Ministry of Manpower (MOM) on Tuesday (June 25). Despite a real wage growth of 1.6 percent in 2021, the overall trend for real wage increases has been on a decline since 2018.
The nominal total wages of full-time resident employees who had been with the same employer for at least one year increased by 5.2 percent in 2023, a slower pace compared to the 6.5 percent growth recorded in 2022. However, MOM noted that nominal wage growth remained higher than average for non-recessionary years.
Wages Growth Across Sectors and Job Levels
All industries and employee groups experienced wage growth last year, though the increases were generally smaller compared to the previous year. Senior management employees saw a wage increase of 4.6 percent, while junior staff and rank-and-file employees recorded growth rates of 6.3 percent and 4.8 percent, respectively.
In terms of industries, administrative and support services saw faster wage growth due to the implementation of the Progressive Wage Model. Nevertheless, most other sectors reported slower wage increases compared to 2022.
Company Performance and Wage Policies
Despite over 80 percent of companies remaining profitable in 2023, slower economic growth impacted overall profitability. The proportion of firms offering wage increases dropped from 72.2 percent in 2022 to 65.6 percent in 2023. Around 6.5 percent of companies reduced wages, while 27.9 percent kept salaries unchanged.
Among firms that raised wages, the average increase was 7.2 percent, slightly lower than the 7.9 percent seen in 2022. Conversely, firms that implemented pay cuts reported an average reduction of 6.2 percent in 2023, larger than the 4.5 percent recorded the previous year. According to Ang Boon Heng, Director of Manpower Research and Statistics at MOM, the reduction was primarily due to lower bonus payouts, reflecting the economic slowdown.
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Expectations for Wage Growth in 2024
Looking ahead, the job market remains tight, with strong demand for professionals, managers, executives, and technicians in industries such as information technology, financial services, professional services, and healthcare. MOM anticipates that these sectors may experience higher wage growth in 2024 compared to 2023.
However, given the uncertain business climate, companies are expected to adopt a cautious approach to wage increases. Surveys conducted in the first quarter of 2024 reveal that fewer firms plan to raise wages in the coming months.
Overall, MOM forecasts that nominal wage growth in 2024 will likely be similar to 2023. With inflation projected to continue its gradual decline, real wage growth is expected to improve.
