30-11-2023 (SINGAPORE) The economic landscape in Singapore is grappling with the harsh reality of soaring inflation, adversely impacting the wages of workers in 2023, as revealed by preliminary labour force data released on November 30 by the Ministry of Manpower (MOM). The repercussions of this inflationary strain are evident in the decline of real incomes for resident workers, with a 3% year-on-year decrease for those at the 20th-percentile salary level and a 2.3% dip for median wage earners.
The term “residents” encompasses both Singaporeans and permanent residents. The employment rate for residents aged 15 and above also witnessed a downturn, dropping from the historic high of 67.5% in 2022 to 66.2% in 2023, despite a labour market described by the ministry as “exceptionally tight.”
MOM emphasised that the overall decline in the employment rate was attributed to more residents opting out of the labour force rather than encountering challenges in securing employment opportunities. The labour force participation rate among residents aged 15 and above decreased from 70% in 2022 to 68.6% in 2023.
While unemployment and long-term unemployment rates exhibited a decline for both professionals, managers, executives, and technicians (PMETs) and non-PMETs, the data showed a broader decrease in unemployment rates for the latter. Non-PMETs experienced a decline from 4.4% in 2022 to 3.6% in 2023, compared to PMETs, whose rate dropped from 2.6% to 2.4% over the same period.
MOM highlighted positive indicators of labour under-utilisation, with the time-related underemployment rate hitting its lowest point in over a decade, dropping from 3% in 2022 to 2.3% in 2023. This improvement signifies that more part-time workers in 2023 achieved their desired work hours compared to the preceding year.
Despite the challenges posed by a tightening labour market and diminishing job vacancies, MOM reported a rise in the proportion of employees holding permanent positions, reaching 90.5%, the highest since 2016. Concurrently, the number of own account workers, including self-employed individuals without employees, regressed to pre-COVID-19 levels after four years of consecutive increases.
MOM acknowledged that the easing demand for deliveries, particularly in the post-pandemic period, likely contributed to a 20% decline in the number of regular platform workers, primarily in the delivery sector. The ministry suggested that these platform workers may have transitioned to salaried jobs due to increased job vacancies and enhanced job stability.
Despite nominal income growth in 2023 compared to 2022, taking inflation into account revealed a decline in real wages for certain income levels. For instance, workers at the 20th-percentile income level earned $2,826 in 2023, a nominal increase from $2,779 in 2022. However, even after factoring in the Workfare Income Supplement (WIS) and related payments, real wages for these workers still experienced a 2.1% decline.
Addressing the challenges posed by high inflation, MOM projected an improvement in real income growth in 2024 as inflation is expected to ease. The ministry highlighted that over the longer horizon from 2013 to 2023, real income growth remained positive, contributing to the narrowing wage dispersion between the 20th-percentile worker and the median worker.
Singapore’s labour market grapples with the complex interplay of economic factors, with MOM optimistic about future improvements but acknowledging the need to address specific challenges faced by certain demographic groups in the workforce. The data, derived from the annual Comprehensive Labour Force Survey involving over 27,900 households, provides a nuanced understanding of the current economic scenario in the city-state.
