More firms raise salaries in 2024 than in 2023, Singapore News
More firms increased their employees' wages in 2024, compared to the year before, said the Ministry of Manpower (MOM) in a report on Wednesday (May 28).
The proportion of firms that raised employees' wages increased to 78.3 per cent in 2024, up from 65.6 per cent in 2023, according to MOM's report on wage practices for 2024.
Concurrently, the proportion of firms that cut employees' pay fell from from 6.5 per cent in 2023 to 3.2 per cent in 2024.
The remaining 18.5 per cent of firms kept the wages of their employees constant. Average wage increase has moderated: MOM
Among firms which raised wages, the average wage increase in 2024 of 6.6 per cent has moderated from 7.2 per cent 2023.
However, among firms which reduced wages, the cut was smaller in 2024 (-3.6 per cent) than in 2023 (-6.2 per cent).
As economic growth continued and employers' profits went up, nominal total wages (which includes employer CPF contributions, basic wage and an annual variable component to account for bonuses) grew by 5.6 per cent in 2024 — comparable to 5.2 per cent in 2023.
Since nominal wage growth outpaced inflation, which has eased since 2023, real wage growth rose to 3.2 per cent 2024, from 0.4 per cent the year before.
Ang Boon Heng, director of MOM's manpower research and statistics department, said on Wednesday that the changes in Singapore's inflation rate "definitely played a very big part" in real wage growth.
He added that 2024 saw the highest real wage growth since the Covid-19 pandemic, when Singapore's core inflation reached a high of 4.1 per cent.
Over the medium-term, real wage growth continues to be supported by real productivity growth, said MOM. Wage growth varies by industry
The ministry added that while wage growth was observed across across the board, it varied based on the industry.
Administrative and support services reported the highest growth at 8.7 per cent, which MOM attributed largely to the Progressive Wage Model (PWM) introduced last year.
Above-average wage increases were seen in financial services as well as community, social and personal services amid continued demand for skilled workers.
Food and beverage services, however, recorded below-average wage growth at 4.8 per cent, while wage increases in wholesale trade (4.2 per cent) and manufacturing (5.1 per cent) were also below average.
Wages in the latter two industries are expected to moderate in the coming year, in view of the on-going geopolitical and trade tensions due to the tariffs imposed by US President Donald Trump.
Overall, rank-and-file as well as junior management employees saw slightly higher wage growth at 5.8 per cent and 5.6 per cent respectively, compared to senior management at 5.1 per cent.
This is partly due to efforts to offset cost-of-living pressures, said MOM.
It added that government policies, such as increases in the local qualifying salary and the implementation of PWM initiatives, have contributed to the uplift in wages of lower-income employees.
The local qualifying salary refers to the minimum wage firms must pay local employees when they hire foreign employees. It was raised from $1,400 to $1,600 per month since July 1, 2024.
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bhavya.rawat@asiaone.com
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