With the economic downturn and higher business costs in 2008, the report found that employers were more restrained in giving pay increases. -- PHOTO: AFP
TWO in five private companies said that they would need to cut wages this year if business conditions worsened, when the Singapore economy contracted sharply by 4.2 per cent in the December quarter.
These firms employ about 44 per cent of the private workforce, according to the Report on Wages in Singapore 2008 and Singapore Yearbook of Manpower Statistics, 2009 released by the Ministry of Manpower on Tuesday.
The top two common measures of wage cut were cutting the annual variable component (74 per cent of firms) and basic wage (47 per cent), , followed by monthly variable component (15 per cent).
The majority of firms with MVC said they intended to cut annual variable bonus and/or MVC when reducing wages.
Establishments with a (MVC) were more confident of gaining their employees' acceptance of a wage cut, if they had to do it, said the 320-page report, which provides information on wages of over 400 jobs, as well as the wage changes and bonuses paid in various industries.
The report revealed that only a small minority (1.7 per cent) of private companies with MVC in their wage structure cut the component last year, given that the economic conditions deteriorted sharply only from the last quarter.
With the economic downturn and higher business costs in 2008, the report also found that employers were more restrained in giving pay increases.
Total wages, comprising basic wages and bonuses, rose by 4.2 per cent in the private sector last year, compared to 5.9 per cent in 2007.
It attributed the wage moderation to the drop in bonus payout from 2.36 months in 2007 to 2.31 months last year. This is a drop of 2.1 per cent, from an increase of 8.3 per cent in 2007.
The basic wage rise of 4.4 per cent was broadly unchanged from 2007.
The report also showed a 7.8 per cent slide in labour productivity from the drop of 0.8 per cent in 2007.
While real wages also declined during the year, it was less than the contraction in productivity. But from 2001 to 2008, growth in productivity had kept pace with gains in wages.
Occupations requiring higher skills and knowledge continued to command higher wages.
In June 2008, the median monthly gross wages was the highest for managers ($6,400), followed by professionals ($4,405) and associate professionals and technicians ($3,000). Clerical ($1,960) and sales and service workers ($1,849) were paid close to $2,000. Among blue-collar occupations, the production craftsmen ($2,137) and plant and machine operators ($2,009) were paid much more than cleaners, labourers and related workers ($975).
Wages also tended to rise with age as workers gain experience and skills and become more productive over the years.
The pace of wage increase with age is more pronounced among managers and professionals as their work is generally more knowledge intensive, the report showed. This was especially true among professionals where wages rose with advancing age groups, peaking for those aged 60 to 64 in 2008. In lower-skilled and blue-collar occupations, wages generally rose more gradually and peaked earlier for those in the late thirties or early forties.
