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Singapore real income growth highest since 2008
Publication Date : 30-11-2013
As inflation eased this year, Singapore saw the highest real income growth since 2008, according to a new Ministry of Manpower (MOM) report released yesterday.
It also showed that in the current tight labour market, the proportion of locals entering the workforce was now greater than before.
The numbers showed that in money terms, the median monthly income of Singaporeans and permanent residents rose 6.5 per cent this year to S$3,705(US$2,045) - slightly slower than the corresponding 7.1 per cent rise in 2012.
But inflation was also higher in 2012, and pricier goods and services eroded more of a worker's wage increases then.
This is why, in real terms - after adjusting for inflation - workers' incomes went up more this year. The 3.9 per cent rise was not only higher than last year's 2.5 per cent, it was the highest increase since the onset of the 2008 global financial crisis.
In tandem with the rise in real incomes, more local residents sought jobs and found them.
A record 66.7 per cent of residents over the age of 15 were working or looking for work this year, and the employment rate of those aged 25 to 64 also rose to a high of 79 per cent.
Older workers fared well. Figures showed that the employment of residents aged 55 to 64 rose to 65 per cent, hitting the government target two years early.
In particular, more older women gained employment. The proportion is now more than half, up from 48 per cent last year.
National Trades Union Congress (NTUC) deputy secretary-general Heng Chee How highlighted yesterday that employment also rose for elderly workers aged 65 to 69.
He wrote on Facebook that the total higher employment rates were the result of a tight labour market and painstaking tripartite efforts to reduce barriers to employment.
He said he will continue to push for a higher re-employment age. Companies must now offer re-employment to eligible workers from age 62 up to 65. The NTUC wants this raised to 67.
Commenting on the rise in real incomes this year, economists noted that one question is to what extent the increases will be felt by workers on the ground.
Some cautioned that wage increases will vary across different industries, and the labour demand and supply situations there.
Barclays economist Joey Chew said lower inflation this year was largely due to a fall in certificate of entitlement prices, which did not directly affect lower-income workers, who do not own cars.
As for local workers entering the labour force in record proportions, experts said this may not ease the burden felt by businesses currently struggling with a tight labour market.
"It depends on the rate of reduction of foreign labour," said UOB economist Francis Tan.
He said the foreign worker policy continues to tighten in Singapore, with higher levies and stricter rules. This is partly why economists expect dollar pay to rise even more next year.
Inflation is also likely to go up, which will threaten real wage gains.
Tan said: "The question is which will grow higher. It is really anyone's call."