Wages grew slower in 2023 than in 2022; slightly higher share of firms cut pay: MOM

SINGAPORE – Wages in Singapore continued growing in 2023, albeit at a slower pace than in the year before.

As economic growth slowed and employers faced challenges maintaining profits, nominal total wages grew by 5.2 per cent in 2023, down from 6.5 per cent in 2022.

Hence, although inflation eased, real wage growth held steady from 2022, at 0.4 per cent after accounting for price changes.

These figures released by the Ministry of Manpower (MOM) on June 25 are for Singaporeans and permanent residents who worked full-time for an employer for at least one year, and include employer contributions to the Central Provident Fund. Total wages include basic wage and an annual variable component.

Average wage rose in all industries in 2023, with the highest increases seen in the accommodation and real estate services sectors, in which wages climbed 8 per cent year on year.

Financial services followed closely behind, with a 7.6 per cent rise.

Conversely, manufacturing was the industry with the most muted growth of 4 per cent in 2023, down from 5.7 per cent in 2022.

The only industry with stronger wage growth in 2023 than in 2022 was administrative and support services, MOM noted.

MOM said the growth reflects the impact of the Progressive Wage Model.

Progressive wages, which refer to a wage ladder tied to productivity and training goals, were extended to those working in administrative roles from March 2023.

MOM said the 5.2 per cent overall nominal growth figure was still higher than the range seen in non-recessionary periods.

The ministry also said the proportion of profitable establishments remained high at 82.1 per cent in 2023.

“However, reflecting the slower economic growth, more establishments reported that they were less profitable than in 2022,” it said.

As such, the proportion of those that gave wage increases to employees declined to 65.6 per cent in 2023, from 72.2 per cent in 2022, MOM said.

Among these firms, the average magnitude of wage increase also slipped to 7.2 per cent, from 7.9 per cent.

Meanwhile, the share of firms that cut employees’ wages rose to 6.5 per cent in 2023, from 5.2 per cent in 2022.

The average size of the pay cuts rose as well, to 6.2 per cent from 4.5 per cent.

When grouped by seniority, wage growth moderated across rank-and-file, junior management and senior management, MOM added.

However, the slowdown in wage growth was more pronounced among senior management, reaching 4.6 per cent in 2023, down from 6.7 per cent in 2022.