So, good news first: So far, real wage growth looks like it’s picked up in 2024. The bad news, however, is that ongoing geopolitical tensions and the threat of trade wars means a slow down could happen in 2025, according to the Ministry of Manpower’s annual wage practices report that was released recently.
MOM’s forward-looking survey, which was conduced early 2025, also revealed less employers are planning pay increments as a result. Only 22% in March 2025 said they had plans to do so, compared to 32% late last year.
Here’s a closer look at some of the other key highlights from MOM.
Singaporean employers: Profitable enough for increments?
Against the backdrop of continued economic growth in 2024, eight in 10 (80.8%) establishments reported that they were profitable in 2024, slightly lower compared to 2023 (82.1%).
However, profitability of establishments varied across industries. Industries such as Real Estate Services, Construction and Wholesale Trade saw fewer profitable establishments, while Manufacturing observed an increase .
More establishments saw sustained profitability, with an increase in the proportion of establishments that performed as well as they did in the previous year (from 31.2% in 2023 to 40.6% in 2024).
Establishments that were less profitable than the preceding year dipped (26.8% to 18.2%), while those with improved profitability largely held up (24.1% to 22.0%).
What it means for Singaporean workers’ wages
With a tight labour market, nominal total wages of full-time resident employees continued to grow, increasing by 5.6% in 2024. This is comparable to the growth in 2023 (5.2%).
As nominal wage growth outpaced inflation, which has eased from 2023, real wage growth picked up in 2024 (3.2% compared to 0.4% in 2023).
Wage increases vs wage cuts
The proportion of establishments that provided wage increases rose from 65.6% in 2023 to 78.3% in 2024. However, a majority of establishments gave the increases due to past organisational performance, rather than forward-looking confidence.
At the same time, there was a decline in the proportion of establishments that cut the
wages of their employees, from 6.5% in 2023 to 3.2% in 2024.
Among establishments which raised wages, the average wage increase in 2024 (6.6%) has moderated from 2023 (7.2%).
Yet, among establishments that cut wages, the severity of wage cut was smaller in 2024 (-3.6%) than in 2023 (-6.2%).
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Workers who saw better wage growth
Rank-and-File (RAF) and Junior Management employees saw slightly higher wage growth (5.8% and 5.6%, respectively) compared to Senior Management (5.1%).
According to MOM, this was partly reflecting efforts to offset cost-of-living pressures.
In addition, government policy factors, such as increases in the Local Qualifying Salary and the implementation of Progressive Wage Model initiatives, have also contributed to higher wage increases among lower-income employees.
As such, MOM expects sustained wage growth for lower-income employees, as progressive wages continue to increase.
Wage growth in each industry
Wage growth was observed across all industries, though the extent of increases varied. Administrative & Support Services reported the highest growth (8.7%), largely due to the Progressive Wage Model (PWM).
Above-average wage increases were also observed in Financial Services (6.7%) and Community, Social & Personal Services (5.7%), amid continued demand for skilled workers.
In contrast, Food & Beverage Services recorded below-average growth (4.8%), reflecting a weaker economic performance for the sector.
Wage increases in Wholesale Trade (4.2%) and Manufacturing (5.1%) were also below average and are expected to moderate in the coming year, given the ongoing geopolitical and trade tensions, concluded MOM.
