Real wage growth unchanged at 0.4% in 2023; fewer firms gave salary bumps: MOM
This is despite the proportion of profitable businesses remaining high
REAL wage growth in Singapore grew by 0.4 per cent in 2023, unchanged from the year-ago figure, data from the Ministry of Manpower (MOM) showed on Tuesday (Jun 25).
The proportion of firms that gave wage increases to their staff declined in 2023, even as the proportion of profitable businesses remained high, said the ministry’s latest wage practices report.
Nominal total wages of full-time resident employees who had been with the same employer for at least a year, which include employer Central Provident Fund (CPF) contributions, rose by 5.2 per cent.
This was lower than the 6.5 per cent nominal wage growth recorded in 2022.
However, lower headline inflation of 4.8 per cent in 2023 – compared with 6.1 per cent in 2022 – meant that real wage growth remained unchanged at 0.4 per cent.
Even as nominal wage growth has slowed, it still “remained higher than the range seen in non-recessionary years”, MOM said.
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This was due to the tight job market and job vacancies outnumbering job seekers, said Ang Boon Heng, director of MOM’s manpower research and statistics department, in a briefing for reporters.
In 2023, all industries continued to see wage growth, though the rate of increase across sectors was generally lower than in 2022, MOM said.
The accommodation (8 per cent), real estate services (8 per cent) and financial services (7.6 per cent) sectors posted the highest wage increases, though they lagged 2022’s figures.
The administrative and support services sector, which posted higher wage growth of 7.1 per cent in 2023 – compared with 5.2 per cent in 2022 – was the exception.
This reflected the impact of the Progressive Wage Model, which kicked in for 32,000 full-time administrators from March last year.
Lower proportion of pay bumps
In 2023, the proportion of firms that raised their staff’s salaries fell to 65.6 per cent, from 72.2 per cent in the year prior.
Meanwhile, the proportion of businesses that reported they were profitable dipped to 82.1 per cent in 2023, from 83.9 per cent previously.
A higher proportion of profitable companies also reported a decline in their profits in 2023 (26.8 per cent) compared with 2022 (22 per cent), MOM said.
Firms that cut wages remained a minority at 6.5 per cent, while 27.9 per cent of businesses left salaries unchanged.
In a LinkedIn post, Manpower Minister Tan See Leng said he was heartened that the proportion of profitable firms remained high, and the majority of companies continued to provide wage increases to their staff.
“For wage growth to be sustainable, it must continue to be supported by commensurate increases in productivity,” Dr Tan said.
“As such, I urge firms to press on with business and workforce transformation, making full use of government programmes to remain competitive and resilient.”
Looking ahead, the job market remains tight, and vacancies continue to outnumber job seekers, Ang said.
There continues to be “strong demand” for PMETs in sectors such as information and communications, financial services, professional services, and health and social services.
PMETs refers to professionals, managers, executives and technicians.
“Then again, we have company polls that come in to say that companies are being more cautious in giving out wage increases” in the first quarter, Ang said. “All that on balance, we expect (nominal) wage growth to remain somewhat similar in 2024.”
National Trades Union Congress assistant secretary-general Desmond Choo noted that the Republic’s businesses “have to keep working on productivity”.
“As of mid-2024, job vacancies outnumber job seekers,” Choo said in a Facebook post. “The economic forecast is still for more improvement.”
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