Total wages grew at a more moderate pace in 2023, says the Ministry of Manpower (MOM) in a press release on June 25.
This came amid cooled labour demand during the year, although the labour market remained tight. In 2023, the job vacancy to unemployed person ratio remained high at 1.87. Unemployment rates during the year stood at 1.8% to 2.3% overall. Resident unemployment rates were at 2.5% to 3.3% while the unemployment rate for citizens stood at 2.7% to 3.5% in 2023.
According to the MOM, nominal total wages of full-time resident employees who had been with the same employer for at least one year grew, but at a slower pace of 5.2% in 2023, down from 6.5% in 2022. That said, wage growth in 2023 remained higher than the range seen in non-recessionary years. Nominal total wages include basic wages, the annual variable component, as well as employer contributions to the Central Provident Fund (CPF).
After accounting for inflation, real wages grew by 0.4%, similar to the increase in 2022.
All industries and employees saw wage growth
All industries continued to see wage growth in 2023 although the magnitude of wage change was generally lower compared to 2022, except for administrative & support services which saw higher wage growth due to the progressive wage model (PWM).
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All types of employees also saw some form of wage growth in 2023, with the growth of rank-and-file employees (4.8%) and junior management employees (6.3%) higher than that of senior management employees (4.6%).
However, wage growth moderated across all employee types in 2023 compared to 2022; the moderation in wage growth for rank-and-file employees and junior management employees was smaller compared to employees in senior management.
Establishments less profitable in 2023
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Most establishments – 82.1% - remained profitable in 2023, although more of such businesses reported that they were less profitable compared to 2022.
As a result, the proportion of establishments which gave wage increases to their employees declined from 72.2% in 2022 to 65.6% in 2023.
About 6.5% of establishments cut their employees’ wages while the remaining 27.9% kept their employees’ wages unchanged.
In 2023, the magnitude of wage increases fell to 7.2% from 2022’s 7.9% while the magnitude of wage cuts increased to 6.2% in 2023, from 2022’s 4.5%.
Outlook
In its statement, MOM says it expects to see wage growth continue for lower-income employees as the local qualifying salary will be increased from $1,400 to $1,600 for full-time residents in 2024.
It adds that the job market remains tight and that there are still more job vacancies than seekers.
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The proportion of vacancies for professionals, managers, executives and technicians (PMETs) in industries such as information and communications, financial services, professional services and health & social services continued to rise in 2023 at 57.2%, up from 56% in 2022.
“These developments could result in higher wage growth in these sectors in 2024 compared to 2023. However, with an uncertain business environment, establishments might adopt a cautious stance with respect to wage increases,” says MOM in its statement.
“Polls conducted in the first quarter of 2024 showed that fewer firms expressed an intention to raise wages of their employees in the next three months,” it adds.
Looking ahead, MOM expects the nominal wage growth in 2024 to remain similar to that of 2023. Real wage growth is expected to improve with Singapore’s inflation expected to gradually moderate.
