Real wage growth in Singapore dampened by inflation in 2022


29th May 2023 – (Singapore) The Ministry of Manpower (MOM) in Singapore reported on May 29 that real wages in the country grew 0.4% in 2022, a drop from the preceding year’s 1.6%. According to the MOM, inflation rates in 2022 were 6.1%, higher than the previous year’s 2.3%, which significantly dampened the pace of real wage growth. Nominal total wages of full-time resident employees who had been with the same employer for at least a year, including employer’s Central Provident Fund contributions, rose by 6.5% in 2022, the highest in over a decade. However, MOM noted that this increase does not take into account inflation.

In 2022, nearly 75% of establishments in Singapore gave wage increases as business activities picked up. MOM reported that the proportion of profitable establishments rose for the second consecutive year to 83.9%, allowing more firms to raise their employees’ wages in 2022 compared to 2021. The proportion of establishments that gave wage increases increased from 60% in 2021 to 72.2% in 2022, slightly higher than the pre-pandemic level of 69.2% in 2019.

All industries saw higher wage growth compared to 2021, but the magnitude of increase varied. Accommodation and retail trade sectorsregistered above-average wage increases at 9.7% and 6.7%, respectively. The financial services, information and communications, and professional services sectors continued to register strong wage increases in 2022, with sustained manpower demand in these industries. However, firms in the manufacturing and wholesale trade sectors raised wages to a lesser degree due to global supply chain disruptions and weakened trade-related activities.

Despite the positive wage growth, MOM warns that total nominal and real wage growth is expected to moderate in 2023. The ministry encourages firms and workers to press on with business and workforce transformation and make full use of government programs to adapt to the changing environment. MOM also encourages all firms to implement the Flexible Wage System as uncertainties ahead continue to underscore the need for resilience and flexibility in wage structures.