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Real starting salaries for polytechnic graduates grew just 0.5% annually over 17 years

The 2023 Polytechnic Graduate Employment Survey reveals a nominal rise in starting salaries but only modest real growth of 0.5% annually over 17 years. Inflation, foreign workforce policies, and nominal reporting raise questions about wage progress. Greater transparency and targeted policies are needed for improvement, opined Leong Sze Hian.

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by Leong Sze Hian

The 2023 Polytechnic Graduate Employment Survey revealed that the median gross monthly salary among graduates in full-time permanent employment increased nominally from $2,800 in 2023 to $2,900 in 2024.

Over the past 17 years, the starting salaries for polytechnic graduates grew nominally by 2.8% annually, rising from $1,805 in 2007 to $2,900 in 2024.

While these figures might seem encouraging, adjusting for inflation reveals a different story.

During the same 17-year period, inflation averaged 2.3% annually, as measured by the Consumer Price Index (CPI), which rose from 79.251 in 2007 to 116.3 in mid-2024. This leaves a real annual increase of just 0.5% in starting salaries.

A modest real increase

In real terms, a polytechnic graduate earning $1,805 in 2007 would experience an annual real wage increase of about $9. This equates to limited improvements in purchasing power, highlighting concerns about wage stagnation relative to the rising cost of living.

Foreign workforce policies and wage competition

Another consideration is the impact of foreign workforce policies, such as the S-Pass scheme. Introduced with a minimum salary of $1,800 – comparable to polytechnic graduates’ starting pay in 2007 – the minimum threshold has since risen to $3,150.

The availability of S-Pass holders at competitive wage levels may contribute to wage suppression for local graduates. Employers might favour S-Pass holders in certain roles due to perceived cost advantages or skill needs, inadvertently capping wage growth for polytechnic graduates.

The case for real salary reporting

One significant limitation of current reporting is the focus on nominal rather than real salaries. The Graduate Employment Survey (GES) provides insights into nominal salary growth but does not account for inflation, making it challenging to assess graduates’ true economic progress.

Including real salary data in future GES reports would provide a clearer picture of how graduates’ purchasing power evolves over time. This transparency could inform policymaking and help graduates make better-informed career decisions.

Policy considerations

To address the challenges faced by polytechnic graduates, several steps can be considered:

  1. Enhanced data transparency: Reporting real salaries in employment surveys would give stakeholders a better understanding of wage trends and purchasing power.
  2. Adjusting workforce policies: Reviewing foreign workforce policies, such as the S-Pass salary thresholds, could mitigate wage compression and ensure fair opportunities for local graduates.
  3. Strengthening upskilling opportunities: Encouraging collaboration between polytechnics and industries to provide skill-upgrading programmes linked to wage increases could improve graduates’ earnings potential.

A need for change

The findings from the 2023 Polytechnic Graduate Employment Survey underline the need for a nuanced approach to wage growth. While nominal salaries have increased, the modest real growth of just 0.5% annually over 17 years calls for targeted policy interventions and greater transparency in employment data.

By addressing these challenges, Singapore can ensure that its polytechnic graduates are better equipped to thrive in a competitive economy, with wages that reflect their contributions and support a sustainable standard of living.

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