Reports of real wage increase that were based on opinion, not fact

by Gangasudhan

This past week, reports have been splashed by the Straits Times and Channel NewsAsia lauding how real wage increase for 2018 will be 2.7%. One might be swayed into thinking that this is some official projection that might translate into an extra $100 or so per month for the average worker next year.

However, this figure is presented by a UK-based research firm called ECA International (registered as Employment Conditions Abroad Limited) as part of an international survey that is “based on information collected from 260 multinational companies for 72 countries” comprising “the following industry groups which included Energy, mining & petrochemicals; Chemical & pharmaceutical; Transport & logistics; Manufacturing & consumer goods; Legal & professional services; Engineering & technology; Retail, leisure & other services; Financial services; Non-profit.”

Arbitrary Data

Essentially, the survey reports the projections made by senior management from these 260 companies from around the world with regard to the likely wage increase they intend to implement in 2018. For Singapore, it is the ballpark figure of 4% - which is the same projection made for 2016 and 2017. In all probability, this figure is just a routine benchmark and has no real substance to informing wage increase decisions at these companies, let alone its implication on the Singapore workforce. The forecasted real wage increase is then calculated based on applying the forecasted inflation rates by the International Monetary Fund (IMF) – 4% (from survey) - 1.3% (based on IMF projection) = 2.7%.

The press release by ECA International – which forms the entire backbone for the ST and CNA articles, uses year-on-year comparison of its own projections to compare ‘changes’ instead of looking at whether its past projections fit what really happened in the labour force.

For instance, the 2016 projection of “generous 4.3 per cent average real wage increases” was in reality 3.5% as reported by Ministry of Manpower, based on “4,800 private establishments, each with at least 10 employees”, and in fact, was the lowest in three years.

Journalism ‘Kat Mana’

It is the business of research firms to present data that is appealing and sounds authoritative. ECA International is under no obligation to cross-reference its findings with established data and compare how its projections have performed against reality. However, journalists – or at least the reporters at news outlets like ST and CNA – have that precise obligation to the people and its readers. It would not have taken more than an hour to cross-check real wage projections with actual wage increases in past years according to Ministry of Manpower (MOM) and give context as to how much credibility the reader could give to the information presented.

Set against the current campaign against ‘fake news’, it is meaningful to consider that not providing the complete set of information to the reader is misleading and therefore technically fake as well. And if we are going to point to ‘standard reporting’ (another word for excusing incompetency?) as the cause of the oversight, then we must accept that the reader is pretty much left on their own to discern how much credibility to give to the facts presented in these types of articles.

And, if that is going to be the case, then it is no different from readers having to figure out if a post on Facebook is fact or fiction.