Wages rose 3.2 per cent last year: MOM survey

This article is more than 12 months old

But more local workers get pay rise last year compared to 2016

Reporter

May 31, 2018 06:00 am

Real wages last year grew at the slowest pace in five years, going up by 3.2 per cent compared with 3.6 per cent in 2016.

But before inflation, nominal wages rose by 3.8 per cent last year compared with 3.1 per cent in 2016.

The reversal is because inflation went up - going from minus 0.5 per cent in 2016 to 0.6 per cent last year, according to a Manpower Ministry report of wage practice, released yesterday.

It shows that 65 per cent of private-sector companies raised the nominal wages of workers last year, up from 58 per cent in 2016.

In turn, companies that cut wages fell, from 17 per cent in 2016 to 12 per cent last year.

This resulted in a higher proportion of local employees getting a pay rise last year - 78 per cent compared with 75 per cent in 2016.

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Economists told The Straits Times that while nominal wages will continue to rise this year, they expect the increase to be at a similar or slower pace.

CIMB Private Banking economist Song Seng Wun said that the average inflation of just 0.2 per cent in the first four months of this year is set to rise.

The ministry report covers 4,900 private-sector establishments with at least 10 workers.

In all, it involves more than 1.2 million workers. Of these, about 600,000 are local full-time employees and 440,000, foreigners.

The rest are local full-time employees of less than one-year service or are part-time workers.

The report shows 62 per cent of establishments that hire low-wage workers raised their pay last year, a rise from 40 per cent in 2016.

These workers earn a monthly basic wage of up to $1,200.

The biggest nominal pay rise last year was given by manufacturers.

Mr Song expects the pay rise in real estate services to be better this year while that in transport and storage could get worse.

Industries such as infocomm and wholesale and retail trade saw the proportion of their profitable businesses increase, while the proportion in the community, social and personal services and construction declined.

The industries with more profitable firms include infocomm, and wholesale and retail trade.

The reverse was the case in the construction industry and community, social and personal services.

While the proportion of profitable establishments slipped one point to 75 per cent last year, the overall proportion of workers in profitable companies increased, said the report.

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Employment