29-5-2023 (Singapore) According to the Ministry of Manpower (MOM) in Singapore, real wages grew by 0.4% in 2022, which was lower than the preceding year’s growth rate of 1.6%. The inflation rate in 2022 was 6.1%, higher than the previous year’s rate of 2.3%, which significantly dampened the pace of real wage growth. However, nominal total wages of full-time resident employees who had been with the same employer for at least a year, including employer’s Central Provident Fund contributions, rose by 6.5% in 2022, the highest in over a decade.
Nearly 75% of establishments in Singapore gave wage increases in 2022 as business activities picked up. The proportion of profitable establishments rose for the second consecutive year to 83.9%, allowing more firms to raise their employees’ wages in 2022 compared to 2021. All industries saw higher wage growth compared to 2021, but the magnitude of increase varied. Accommodation and retail trade sectors registered above-average wage increases at 9.7% and 6.7%, respectively. The financial services, information and communications, and professional services sectors continued to register strong wage increases in 2022, with sustained manpower demand in these industries. However, firms in the manufacturing and wholesale trade sectors raised wages to a lesser degree due to global supply chain disruptions and weakened trade-related activities.
MOM warns that total nominal and real wage growth is expected to moderate in 2023, despite the positive wage growth in 2022. The ministry encourages firms and workers to continue with business and workforce transformation and make full use of government programs to adapt to the changing environment. MOM also encourages all firms to implement the Flexible Wage System to build resilience and flexibility in wage structures. This is important as uncertainties ahead continue to underscore the need for firms to be adaptable and able to respond to changes in the business environment.
