SINGAPORE - All sectors saw a larger percentage increase in wages last year compared with 2020, buoyed by the impact of eased pandemic safe management measures and travel restrictions.
The strong growth cut across both outward- and domestic-oriented sectors, said the Ministry of Manpower (MOM) in a statement accompanying its annual wage practices report on Monday (May 30).
But six sectors posted particularly strong results, even outdoing the pace of wage growth in 2019, before the pandemic.
They are retail trade, professional services, information and communications, wholesale trade, manufacturing and construction.
Outward-oriented sectors such as information and communications, financial and services, as well as manufacturing, registered healthy expansion even in the midst of the pandemic and continued to enjoy strong wage growth in 2021, said the ministry.
For instance, even at the height of the pandemic in 2020, the information and communications sector still logged total wage growth of 1.5 per cent.
For 2021, the wage growth accelerated to 5.1 per cent for the sector.
Retail trade clinched the highest wage increase overall, at 5.5 per cent last year, over three percentage points more than in 2020.
Even stronger was wage growth specifically for rank-and-file workers, defined as those in technical, clerical, sales, service, production, transport, cleaning and related positions in retail.
These employees, who do not hold managerial or executive positions, clocked 6.3 per cent in total wage growth, up from 2.2 per cent in 2020.
However, much of the expansion for these workers in 2021 was down to other wage components, as basic wage rose only 2.1 per cent for them.
In its statement, MOM noted that even sectors that were more affected by the pandemic recorded wage increases as demand for manpower climbed in tandem with the reopening of borders.
The accommodation sector, which was the hardest hit by the pandemic, with wages cut by more than 5 per cent on average in 2020, rebounded to a 1.7 per cent increase. However, this is still short of the 3.5 per cent posted in 2019 for the sector.
However, MOM cautioned: "With recent shocks to the global supply chains, inflation is projected to stay elevated and dampen real wage growth."
Ms Rose Tong, executive director of the Singapore Retailers Association, said a reason for the high wage growth in the retail sector was the increased pressure on employers to retain workers, particularly after the exodus of Malaysian workers as border restrictions curbed commuting across the Causeway.
Noting that this shortage is likely to stay for some time, she added: “Some have not returned yet and some may never return.”
Ms Tong said some employers have given feedback that some former employees, when asked to return to Singapore, opted to remain in Malaysia.
She also said the percentage increase in wages for rank-and-file staff was likely higher than for management staff in the retail sector, as there was a greater need to retain rank-and-file staff who generate value by clinching sales in-store.
“Some could also have doubled up on job roles and been fairly compensated. A lot of retailers had to go online and retail staff actually learnt how to do sales online,” added Ms Tong.
Temporary wage support schemes to support hiring during the pandemic, such as the Jobs Growth Incentive (JGI), could also have offset the expense of subsequent wage increases.
Introduced in September 2020, the JGI encouraged employers to hire more locals by providing wage support of up to 50 per cent for as long as 18 months for eligible employees.
“You leave a job and someone else could afford to pay you a lot more because 50 per cent would be borne by the Government,” said Ms Tong.
The survey covers wage increases only for staff who have served in the same company for at least a year, and not those who got a pay rise after switching jobs.
Ms Audrey Yap, honorary treasurer of the Singapore Manufacturing Federation, said wage growth in 2021 in the manufacturing sector could have been higher than before the pandemic due to an ongoing broad-based labour crunch, as well as to defray higher living expenses for foreign workers.
She said the industry is “not homogeneous”, with some burgeoning sectors, such as pharmaceuticals, semiconductors and food and beverage driving demand for workers more than others and affecting the consequent wage growth.
She also noted that wage growth is likely to accelerate, with the small and medium manufacturing enterprises that the federation represents likely to bear the brunt.
“There is an upward trajectory, but we don’t know at what point the ceiling will be reached and we don’t know how steep the growth will be,” she added.