MOM: Total wage continued to grow as the economy and labour market improved in 2018

More employees received wage increases and total wage continued to grow at a faster pace than in 2017, even after accounting for inflation as the economy and labour market improved in 2018, the Ministry of Manpower (MOM) announced on Wednesday (29 May).

The ministry also stated that establishments’ practices on wage increases and variable payments were aligned with the 2018/2019 National Wages Council’s (NWC) recommendations, which are the key findings from the “Report on Wage Practices 2018” released by the Manpower Research and Statistics Department of MOM.

Total wage growth was higher than a year ago in most industries

According to the report, total wages (including employer CPF contributions) in the private sector grew by 4.6% in 2018, higher than the 3.8% in 2017.

Real total wage also rose at a faster pace, from 3.2% in 2017 to 4.2% in 2018, it noted.

In most industries, total wage growth in 2018 was higher than the previous year, with financial & insurance services and professional services posting the highest growth.  Manufacturing, food & beverage services and retail trade saw similar or moderated wage growth.

More employees received higher wage increases

As a result of improved profitability¹, the proportion of establishments that raised their employees’ total wages in 2018 increased to 67% from 65% in 2017.  The proportion of establishments that cut total wages also fell to 9% in 2018 from 12% in 2017.

Overall, the proportion of employees who received wage increases rose to 81% in 2018 from 78% in 2017.  Their average wage increase was also higher in 2018 (5.8%) compared to 2017 (5.1%).

As for employees who received wage cuts, the average wage cut was higher in 2018 (-4.3%) compared to 2017 (-3.9%).  Nonetheless, their proportion among all employees decreased from 10% in 2017 to 8% in 2018.

Establishments’ wage practices were aligned to NWC’s guidelines

The performance of establishments and individuals were employers’ main considerations when determining wage change or variable payment.  Profitable companies gave higher wage increases and bonuses compared to loss-making ones.

The ministry also noted that the proportion of establishments that adopted the NWC’s quantitative guidelines for low-wage employees performing outsourced work rose to 55% in 2018 from 44% in 2017.

Although the adoption rate for low-wage employees, in general, declined from 48% in 2017 to 45% in 2018, the main reason establishments did not give wage increase was poor business conditions, the ministry noted.

The Report on Wage Practices 2018 is available at MOM’s website.