65% of establishments raise wages in 2017, Ministry of Manpower reveals
The Manpower Research & Statistics Department has just released the "Report on Wage Practices 2017”.
As the economy picked up, a larger proportion of establishments raised wages, leading to more employees receiving wage increases. The average wage increases for this group of employees was higher in 2017. In addition, the proportion of profitable establishments declined at a slower pace than the previous three years. Total wages grew faster in 2017 compared to 2016. However, after accounting for positive inflation, real wage increase was moderated.
The proportion of profitable establishments declined from 76% in 2016 to 75% in 2017, at a slower pace than the previous three years. The proportion of profitable establishments rose in industries such as infocomm, and wholesale & retail trade, but declined in community, social & personal services and construction. Overall, this led to an increase in the proportion of employees who worked in profitable establishments. There were also a larger proportion of establishments with similar or higher profits than the previous year. Correspondingly, a larger proportion of employees were in such establishments in 2017 compared to 2016.
More establishments raised their employee’s wages in 2017 (65%) compared to 2016 (58%). The proportion of establishments that cut total wages fell, from 17% in 2016 to 12% in 2017. As a result, the proportion of employees who received a wage increase also rose from 75% to 78%. The average wage increase for this group of employees was higher in 2017 (5.1%) compared to 2016 (4.9%). The proportion of employees who received wage cuts decreased from 13% in 2016 to 10% in 2017. The average wage cut for them was lower in 2017 (-3.9%) compared to 2016 (-5.0%).
Nominal total wages (including employer CPF contributions) in the private sector grew by 3.8% in 2017, higher than 3.1% in 2016. However, after accounting for the change in inflation from -0.5% in 2016 to 0.6% in 2017, real total wage growth was 3.2% in 2017, slightly lower than the 3.6% in 2016.
In most industries, nominal total wage growth in 2017 was maintained at or higher than last year’s levels. These industries include professional services, accommodation & food services, information & communications, financial & insurance, wholesale & retail trade, and manufacturing. The exceptions were transportation & storage, administrative & support services and real estate services.
62% of establishments with low-wage employees earning a monthly basic wage of up to $1,200 granted wage increases to these employees in 2017, up from 40% in 2016. Among establishments with outsourced employees earning up to $1,200, 55% granted wage increases to these workers. The remaining 45% of establishments did not grant wage increments as they were constrained by contractual agreements, felt they were already paying market rates, or were not performing well. The basic wage increase for low-wage employees (8.9%) and outsourced low-wage workers (7.5%) continued to be higher than all rank-and-file workers in these establishments (5.4%).
In line with the National Wage Council’s (NWC) approach for employers to enhance flexibility in their wage structure for competitiveness which facilitates the sharing of productivity gains with workers, 88% of private sector employees now work in establishments that have some form of flexible wage system, broadly similar to previous years.
Photo courtesy of Shutterstock.com