Middle-income employees in Singapore saw fastest salary growth

Employees who switched to productive firms doubled their income, while those who stayed in less productive firms saw salaries increased by 50%.
By: | November 1, 2023
Topics: Compensation and Benefits | News | Singapore

Middle-income employees in Singapore saw faster salary growth than other income groups between 2011 and 2021, according to a report by the Monetary Authority of Singapore (MAS).

The report found that nominal income for the “broad middle” group, which refers to Singapore resident employees in the 21st to 80th income percentiles of their age cohorts, climbed 42% over the period, topping the 36% growth for earners in the lower and higher brackets. Furthermore, nearly half of these middle-income employees moved up the earnings ladder, with 45% climbing by at least one income decile or position in the subsequent 10 years, and 23% advancing by two income deciles or more.

MAS said that middle-income employees who moved to more productive or larger organisations saw their incomes more than double over the 10 years, while those who remained in less productive or smaller organisations saw smaller income growth of about 50% over the same period.

The report also noted that middle-income employees who underwent further education saw a larger increase in average incomes than those who did not.

The central bank said that Singapore’s economic growth slowed to an average of 3.7% a year for the period from 2011 to 2022, down from 5.9% in the decade before, and will continue to slow in the next 10 years as demographic constraints such as a low birth rate and an ageing population become “more binding”.

READ MORE: Narrowing Singapore’s wage gap and promoting lifelong learning

MAS also warned that structural shifts in the next phase of the nation’s economic growth, including generative AI and technological changes, could impact the jobs and incomes of middle-income employees. Employees need to refresh their skills for career transitions, it added.

Looking ahead, MAS predicted a further slowdown in labour demand, with easing pay growth in 2024. Hiring is expected to remain supported in domestic-oriented services and travel-related sectors, with external-facing sectors potentially firming up in late 2024, reported The Straits Times.