SINGAPORE: Observers said there was a "gulf of
discrepancy" last year, between Singapore's economic growth and
workers' salaries.
Despite the economy growing 14.5 per cent last year,
data from the Ministry of Manpower released recently, showed
nominal wages grew just 5.5 per cent.
The inflation rate last year was 2.8 per cent.
When that's factored in, real wages dipped to just 2.7 per cent in
2010.
Kelly Services professional & technical general manager Ben
Batten said: "The reality was that while there have been growth in
some sectors in salaries, compared to 2007, we're back at similar
sort of levels.
"The way that equates to dollars and cents in the hands of
employees is actually not that great.
"We've got heavy inflation pressures and overall, with niche
positions, we are seeing some highly competitive salaries.
"But if you take an average placement, 100 placements over the
course of a particular period of time for similar roles, we're not
seeing big spikes".
Some human resource practitioners said the picture is not likely to
change this year.
Primestaff Management Services managing director Ronald Lee said:
"For 2011, very much will depend on the inflation again, because
the consumer price index is projected to grow, maybe for the year,
about four per cent.
"So, at four per cent, if you want to maintain a real wage increase
of 2.7 per cent or more, then you need to provide a nominal wage
increase of maybe seven, or 7.5 per cent even".
But labour economists said they think real wages could actually go
up, even "going off the chart".
SIM University labour economist Randolph Tan said: "One is to make
up for last year's discrepancy between real output growth and real
wage growth.
"And of course, this year, there are many weather-related
disruptions and other kinds of natural catastrophes that would feed
into commodities and energy prices further.
"And this would actually give an additional push to inflation and
then into wage growth".
In addition, Dr Tan said he believes the economy is heading towards
a tighter labour market, and this could also push real wages
up.
"Over the last few years, the Singapore labour market has been very
much determined by strong demand for labour," Dr Tan said.
"Also, the strong demand for labour has been accommodated by a very
relaxed supply regime. But I think we are on the cusp of what is
most likely to be a policy shift in that regard.
"It's certainly going to be true that we are not going to have as
free labour market situation going forward.
"So, what I think in the medium term will happen, is that we could
actually have a tightening-labour-market situation, and a
tightening-labour-market situation will actually act towards an
upward pressure on wages."
In April, the National Wages Council recommended workers be
rewarded with wage increases this year.
This is in keeping with the strength of Singapore's economy and the
performance and prospects of companies'.
The council also suggested bosses consider a one-off special
lump-sum payment to help employees cope with inflation.
Whether wages will rise by a lot more this year, one thing is
certain.
Wages of employees in sectors such as financial services,
manufacturing, hospitality, IT and communications could go up by
more than average due to heavy demand for such workers.
Another sector is construction, following the government's
announcement to ramp up the supply of public housing.
-CNA/wk
