Workers at the 20th percentile experience a 3% decline in real wages, with government transfers mitigating the decrease
According to the Ministry of Manpower (MOM), real median income in Singapore dropped by 2.3% in 2023, primarily due to high inflation eroding nominal wage growth. For workers at the 20th percentile, real wages decreased by 3% year-on-year, although the decline was reduced to 2.1% after accounting for government transfers such as the Workfare Income Supplement.
While real income growth remained negative for the year, it has shown positive growth over the past decade, with real median incomes increasing by 2% annually from 2013 to 2023, and real incomes at the 20th percentile growing by 2.6% per annum during the same period.
MOM expects that real income growth will remain negative for the rest of 2023 but anticipates improvements in 2024 due to easing inflation. However, the extent of the recovery will depend on factors like labour market tightness and a slower economy. Certain sectors, such as financial services, professional services, and insurance, may experience above-average nominal wage growth due to a tight labour market and higher productivity levels.
Economists predict modest improvements in 2024, with some estimates suggesting real income growth could range between 0 to 1%. For workers at the 20th percentile, targeted government transfers may help boost income growth to around 2 to 3%.
The employment rate for residents aged 15 and above decreased to 66.2% from 67.5% in the previous year, as Singapore continues to experience structural challenges, such as its ageing population. Despite this, unemployment rates remain low, with long-term unemployment also declining for both PMETs (professionals, managers, executives, and technicians) and non-PMETs.
Additionally, the resident time-related underemployment rate fell to its lowest level in over a decade, reflecting an increase in part-time workers having the desired work hours. The proportion of permanent jobs also rose to 90.5%, the highest level since 2016.
