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Real wages in Singapore up 5.4% last yearNEWS June 3, 2016
SINGAPORE: Real wages in Singapore rose 5.4 per cent last year amid negative inflation, the Ministry of Manpower (MOM) said in its annual report on wage practices on Thursday (Jun 2).
In the private sector, nominal wages grew 4 per cent in 2015, down from the 4.9 per cent increase the year before. When employer Central Provident Fund (CPF) contributions are factored in, growth in total wages remained stable at 4.9 per cent, due to the increase in employer CPF contributions last year.
Taking into account the 0.5 per cent fall in consumer prices in 2015, real wages, including employer CPF contributions, rose by 5.4 per cent, compared with 3.9 per cent the previous year.
FIRMS HIT BY WEAKER ECONOMY
However, companies were hit by softer economic conditions, with fewer turning a profit and fewer giving salary increases, the ministry said.
About 79 per cent of companies reported that they were profitable, down from 82 per cent in 2014. The proportion of firms which were profitable but did not do as well as the previous year rose to 38 per cent from 32 per cent in 2014.
Only 64 per cent of firms raised the total wages of their employees last year, down from 72 per cent in 2014. About 25 per cent of firms kept wages unchanged, compared with 20 per cent in 2014, while 11 per cent of firms cut wages, compared with 7.7 per cent in 2014.
Among companies which had low-wage workers – those earning a monthly basic salary of up to S$1,100 – nearly half, or 46 per cent, of them increased the wages of these employees. This was down from 59 per cent in 2014 for employees earning up to S$1,000.
Only 18 per cent of these firms gave an increment of at least S$60 – the National Wage Council’s recommendation for this year – compared with 31 per cent the previous year.
Among firms that did not increase wages, half of them indicated that they were already paying the workers the market rate, while others cited poor business and high business costs as reasons.
The report also noted that more firms were adopting flexible or performance-based wage measures. Most employees, or about 90 per cent of all private-sector employees, were under some form of flexible wage system last year – the highest figure since 2004, MOM said.
Some of the more widely-adopted measures included having a narrow maximum-minimum salary ratio, linking variable bonus to Key Performance Indicators, and having a Monthly Variable Component in the wage structure.
news source: channelnewsasia.com
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