2022 saw real wage rises fall in Singapore
- Josephine Tan
- Topics: Compensation and Benefits, Home Page - News, News, Singapore
Almost three in four employers in Singapore gave wage increases in 2022, up from six in 10 in 2022 and about seven in 10 in 2019. While this was the largest margin seen in a decade, the impact of high inflation resulted in reduced real pay rises compared to 2021, according to data released by the Ministry of Manpower (MOM).
MOM reported that nominal wages rose by 6.5% in 2022, compared to 3.9% in 2021. However, due to higher inflation, real total wages only grew by 0.4%, the lowest since 2012. Headline inflation in 2022 reached 6.1%, significantly higher than the 2.3% of 2021. Furthermore, real basic wages, excluding employer Central Provident Fund (CPF) contributions, experienced a decline of 1% for the first time since 2012.
Among employers who raised wages, the average increase in 2022 was 7.9%, higher than the 6.3% average increase in 2021. MOM predicted that wage growth, both nominal and real, will moderate in 2023 due to the global economic slowdown and an uncertain business environment, leading organisations to approach salary increments cautiously.
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All industries experienced higher wage growth in 2022 compared to 2021. Accommodation and retail trade recorded above-average wage increases of 9.7% and 6.7%, respectively, as organisations in these sectors aimed to attract and retain employees amidst the recovery in tourism demand. Outward-oriented sectors such as financial services, information and communications, and professional services registered strong wage increases between 7.6% and 9%, reflecting sustained manpower demand in these industries.
In terms of employee types, junior executives and managers witnessed the highest increase in basic wages at 5.7%, while rank-and-file employees and senior management experienced around 5% growth. Slightly over half of the loss-making organisations in Singapore raised wages, compared to a higher percentage of profitable organisations, ranging between seven and eight in 10, depending on whether their profit exceeded their 2021 performance, reported The Straits Times.
