Singapore wages up slower in 2023 than in 2022

Salary growth: Commuters walk through the rain in Singapore. Nominal total wages were up by 5.2% in 2023, down from 6.5% in 2022. — Bloomberg

SINGAPORE: Wages in Singapore continued growing in 2023, albeit at a slower pace than in the year before.

As economic growth slowed and employers faced challenges maintaining profits, nominal total wages grew by 5.2% in 2023, down from 6.5% in 2022.

Hence, although inflation eased, real wage growth held steady from 2022, at 0.4% after accounting for price changes.

These figures released by the Manpower Ministry are for Singaporeans and permanent residents who worked full-time for an employer for at least one year, and include employer contributions to the Central Provident Fund.

Total wages include basic wage and an annual variable component.

Average wage rose in all industries in 2023, with the highest increases seen in the accommodation and real estate services sectors, in which wages climbed 8% year-on-year.

Financial services followed closely behind, with a 7.6% rise.

Conversely, manufacturing was the industry with the most muted growth of 4% in 2023, down from 5.7% in 2022.

The only industry with stronger wage growth in 2023 than in 2022 was administrative and support services.

The ministry said the growth reflects the impact of the Progressive Wage Model.

Progressive wages, which refer to a wage ladder tied to productivity and training goals, were extended to those working in administrative roles from March 2023.

It said the 5.2% overall nominal growth figure was still higher than the range seen in non-recessionary periods.

The ministry also said the proportion of profitable establishments remained high at 82.1% in 2023.

“However, reflecting the slower economic growth, more establishments reported that they were less profitable than in 2022,” it said.

As such, the proportion of those that gave wage increases to employees declined to 65.6% in 2023, from 72.2% in 2022, it said.

Among these firms, the average magnitude of wage increase also slipped to 7.2%, from 7.9%.

Meanwhile, the share of firms that cut employees’ wages rose to 6.5% in 2023, from 5.2% in 2022.

The average size of the pay cuts rose as well, to 6.2% from 4.5%. — The Straits Times/ANN