Singapore - Tight labour market lifts workers' wages in 2011

SINGAPORE: Despite slower economic growth last year, Singapore workers' wages have continued to rise on the back of a tight labour market.

Key findings from the latest Wages Report released by the Manpower Ministry (MOM) on Friday show that total wages (including employer CPF contributions) in the private sector rose by 6.1 per cent, higher than the increase of 5.7 per cent in 2010.

Real wage increases have also been broadly in line with labour productivity growth.

From 2000 to 2011, real total wages including employer CPF contributions increased by 1.6 per cent per annum, while labour productivity grew by 1.7 per cent per annum.

Basic wages of those in the private sector went up by 4.4 per cent last year, higher than the increase of 3.9 per cent in 2010.

More bonuses were paid out.

Song Seng Wun, regional economist, CIMB Research, said: "If you look at job creation, it was fairly stable last year... Despite the uncertain outlook, businesses are still hiring, so as a result of which, we still manage to see modest wage growth as businesses compete to hire."

But when inflation is factored in, real wages increased only by 0.9 per cent last year - lower than the gain of 2.9 per cent in 2010.

The corresponding figures when adjusted using CPI excluding imputed rentals on owner-occupied accommodation were 1.9 per cent and 2.4 per cent.

The report found that financial services and professional services were among the top three highest-paying industries across many occupational groups. The accommodation and food services, and construction were among the lower-paying industries.

Managers were still the highest-paid group, with median monthly gross wages at S$6,630 in June last year.

Analysts believe wages for lower-skilled jobs will see better growth this year.

"As the government tightens control of foreign workers and as a result of the reduced supply, perhaps the wage growth at the lower income group will pick up pace over the next 12 to 15 months or so, despite the slower growth momentum and more modest job creation that we are likely to see this year," said Mr Song.

The report also found that wages tend to rise with age as workers gain experience.

Steve Price, general manager, International Engine Component Overhaul, said: "Wage increase is not directly related to age. It's more to do with the increase to the levels of experience and therefore their ability to contribute to the business, and as that happens then their pay rates will rise."

The report also stated that like in other countries, women in Singapore typically earn less than men. The gender wage gap was narrower in the white-collar occupations, with women in the prime working age of 35 to 39 earning close to or the same as men in clerical, professional or sales and services occupations.

The report also noted that with age, females are more likely to take career breaks to care for their family which reduced their work experience and therefore pay, relative to men.

- CNA/cc

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