Industries covered under PWM see steady wage growth: MOM Report

Rank-and-file employees in industries recently covered under the Progressive Wage Model (PWM) in 2022/23 saw steady wage growth last year.

According to the Ministry of Manpower (MOM) Report on Wage Practices 2023, released on 25 June 2024, rank-and-file workers in the food & beverage services, retail trade and administrative & support services sectors saw an increase in their total wages by 4.7, 5.6 and 8.0 per cent respectively.

The average wage growth for rank-and-file employees in 2023 was 4.8 per cent.

The PWM requirements first came into effect for the retail sector on 1 September 2022, and on 1 March 2023 for the food & beverage and administrative & support services sectors.

MOM expects the wages in these industries to continue growing steadily in the years ahead, along with the planned increase of the monthly Local Qualifying Salary from $1,400 to $1,600 in July 2024 and the continued expansion of the PWM.

Nominal wages continued to grow

The nominal total wages of full-time resident employees who have been with the same employer for at least one year grew in 2023, albeit slower than in 2022.

MOM shared that wage growth slowed from 6.5 per cent in 2022 to 5.2 per cent in 2023.

After accounting for inflation, however, real wage growth was similar for both years, growing at 0.4 per cent.

NTUC Assistant Secretary-General Desmond Choo said in a Facebook post that keeping wages ahead of inflation is key.

“We have to keep working on productivity. NTUC’s Company Training Committees boost productivity through training and technology, supporting fair and sustainable wages in a dynamic economy,” he wrote.

Wage growth by employee type

The report noted that rank-and-file and junior management employees' wage growth was higher than that of senior management employees in 2023.

Rank-and-file and junior management wages grew by 4.8 and 6.3 per cent, respectively, while senior management wages grew by 4.6 per cent.

Overall, wage growth slowed across all employee types in 2023 compared to 2022.

Rank-and-file wage growth fell from 5.8 to 4.8 per cent, with junior management employees' growth falling from 7.4 to 6.3 per cent in 2023. Senior management employees saw the most significant slowdown in wage growth, from 6.7 to 4.6 per cent.

Wage growth by industries

According to the report, all industries showed wage growth in 2023.

The growth rate across industries was generally lower than in 2022, except for the administrative and support services sector, which grew by 7.1 per cent in 2023, compared to 5.2 per cent in 2022.

Companies continued to profit in 2023

The report also noted that the proportion of profitable establishments in 2023 remained high, at 82.1 per cent.

However, many companies reported that they were less profitable compared to 2022.

The proportion of establishments that gave wage increases to their employees declined to 65.6 per cent in 2023, compared to 72.2 per cent in 2022.

The number of companies that cut their employees' wages in 2023 remained low at 6.5 per cent, with 27.9 per cent of companies surveyed keeping their wages constant.

Outlook for 2024

While the job market remains tight, and vacancies continue to outnumber job seekers, MOM expects the Singapore economy to improve in 2024, with nominal wage growth remaining similar to 2023.

However, with inflation projected to grow slower, MOM and Mr Choo expect an improvement in real wage growth.

"The economic landscape still has room for more improvement," wrote Mr Choo.

MOM shared that there continues to be a strong demand for PMET workers in information and communications, financial services, professional services, and health and social services.

The demand may result in higher wage growth in these sectors in 2024 compared to 2023, said the ministry.