The strong recovery of Singapore’s economy and a tight labour market prompted more employers to raise their employees’ wages in 2021, following a period of wage moderation in 2020. As a result, more employees received wage increases last year, and wages also grew at a faster pace than in 2020.
Total wage growth for workers who stayed in the same company for at least a year was 3.9 per cent in 2021 compared to 2.1 per cent in 2020. This follows an economy currently in rebound with an expansion of 7.6 per cent, including the proportion of profitable employers of 75 per cent in 2021 compared to 63 per cent the year before.
The wage growth is seen in all sectors; those in ICT saw an increase of 5.1 per cent, while other sectors such as financial and insurance service gained 4.1 per cent, and manufacturing (4 per cent). Retail trade saw the biggest gain of 5.5 per cent.
In 2022, the Ministry of Manpower, Singapore expect the tight labour market to support continued nominal wage growth, although the significant relaxation of border restrictions will allow the non-resident workforce numbers to recover and ease some of the tightness. However, downside risks in the global economy remain, such as the ongoing Russia-Ukraine conflict and protracted global supply disruptions, which could moderate demand and nominal wage growth. With recent shocks to the global supply chains, inflation is projected to stay elevated and dampen real wage growth.