Real total wages in pte sector down 0.4% in 2012: MoM

Real total wages in pte sector down 0.4% in 2012: MoM

SINGAPORE - Real total wages, including employer CPF contributions, in Singapore's private sector declined by 0.4 per cent in 2012 after rising by 0.9 per cent in 2011, the Ministry of Manpower (MoM) said on Wednesday.

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Here is the full report from MoM:


The tight labour market continued to raise workers' wages, but the pace of increase has moderated in 2012, amid the weaker economic conditions. A large majority of employees were also under some form of flexible wage system. These are the key findings from the "Report on Wage Practices, 2012" released by the Ministry of Manpower's Research and Statistics Department.

Main Findings

Total wages (including employer CPF contributions) in the private sector rose by 4.2 per cent in 2012. This was lower than the growth of 6.1 per cent in 2011, reflecting the weaker economic conditions in 2012.

After adjusting for inflation using the Consumer Price Index(CPI) for all items, real total wages (including employer CPF contributions) declined by 0.4 per cent in 2012, after rising by 0.9 per cent in 2011.

When adjusted using CPI less imputed rentals on owner-occupied accommodation (OOA), which relates more directly to the actual cash expenditures of households, real total wages (including employer CP F contributions) rose by 0.5 per cent in 2012, after increasing by 1.9 per cent in 2011.

Over the long term, real wage increases have been supported by productivity growth.

Labour productivity grew on average by 1.6 per cent per annum, exceeding the growth in real total wages (including employer CPF contributions) of 1.2 per cent per annum over the decade from 2002 to 2012.

In the immediate post-SARS years, labour productivity grew strongly on the back of robust GDP growth. However, in the last 5 years, labour productivity shrank by 0.4 per cent per annum as economic growth was driven primarily by employment.

A large majority of employees in the private sector were under some form of flexible wage system, following a general uptrend in the implementation of flexible wage measures recommended by the tripartite partners representing employers, workers and the government in 2004.

In December 2012, 87 per cent of private sector employees were working in establishments which had at least one of the flexible wage components recommended by the tripartite partners. This was comparable to the 86 per cent in December 2011 and notably higher than the 76 per cent in June 2004.

Having a narrow maximum-minimum salary ratio was the most common wage recommendation adopted, with nearly two in three (65 per cent) private sector employees working in establishments with this flexible wage component.

This was followed by linking variable bonus to Key Performance Indicators (KPI) (49 per cent) and having the Monthly Variable Component (MVC) (34 per cent) in the wage structure.

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