Income growth for lower-wage workers was stronger in 2022 compared to that of the median worker, supported by tripartite initiatives such as the Progressive Wage Model.

SINGAPORE: Singapore's resident labour force continued to see improvements in 2022, with the employment rate rising for the second consecutive year, the Ministry of Manpower (MOM) said in the advance release of its annual Labour Force in Singapore report on Thursday (Dec 1).

It found that the employment rate rose, incomes grew and a higher percentage of Singapore residents were working as professionals, managers, executives and technicians (PMETs) in 2022 as the country continued its recovery from the COVID-19 pandemic.

"The broad-based improvement in resident labour force performance reflects the continued economic recovery and the gradual normalisation of business and social activities," MOM said.

"Amid the evolving economic environment, we encourage employers and workers to make full use of government programmes to adapt and accelerate the pace of transformation.

"This will enable us to develop our workers and build a more competitive and resilient workforce, while ensuring that wage growth is sustainable and supported by productivity growth."

At a press briefing on Thursday, Manpower Minister Tan See Leng said that real median income growth has improved from 2021 despite higher inflation. 

"I know that inflation and the rising cost of living are top of mind issues that affect many Singaporeans. According to our findings, real median income growth for residents improved from last year to 2.1 per cent, but remained a step down from the years preceding the pandemic, when inflation was lower."

He added that the Government will continue to support low wage workers through initiatives such as the Progressive Wage Mark scheme. 

"Notwithstanding the encouraging news on our labour force, I would like to caution that inflation and the geopolitical uncertainties cannot be ignored," said the Minister, who urged employers and workers to make full use of the Government programmes to build a competitive and resilient workforce. 

OUTLOOK AND RETRENCHMENTS

Asked about the ministry's outlook given rising inflation, Dr Tan said growth is expected to soften to 0.5 to 2.5 per cent and will be uneven across industries, with outward facing industries such as manufacturing seeing some softening due to supply chain restrictions. 

Inward facing industries such as hospitality, however, will see an increase in hiring. 

"That's my point about the uneven, some parts of it, the inner facing ones because of the rise of international visitorship and international arrivals in Singapore. We see quite a nice uplift in terms of the growth," said Dr Tan. 

The Manpower Minister added that he did not expect Singapore to go into a full scale recession given the current trends, despite this softening.

Touching on the recent layoffs in the tech sector, the Minister referred to numbers he gave in Parliament earlier this week. He noted the uptick in retrenchments in the later half of this year. 

While there more than 200 retrenchment notices in the first six months of this year, this increased to 1,270 from July to mid-November this year. Among these, around eight in 10 were in non-tech roles such as sales, marketing and corporate functions.

Salaries in tech sector still showed a good median growth, with median incomes continuing to trend upwards, he added. 

"I've also spoken to some industry players ... They feel that the recent round of internationally-announced layoffs involving many tech companies is actually going to remove some of the froth in terms of the high asking salaries of people in that sector itself.

"And many of the insiders within the industry have sort of feedback to me, that it may not necessarily be a bad thing, because they think that the growth will be more sustained going forward," said Dr Tan.

Those who have been cut from tech roles within this sector will have 10 vacancies for them elsewhere, he added.

EMPLOYMENT RATE UP, HIGHER SHARE OF RESIDENTS IN PMET ROLES

The employment rate for residents aged 15 and above rose for the second consecutive year to reach 67.5 per cent in 2022, MOM said. This is 2.3 percentage points higher than the rate in 2019, before the pandemic.

The Manpower Ministry added that Singapore would rank third for overall employment rate amongst Organisation for Economic Co-operation and Development (OECD) countries.

Unemployment rates also fell for workers across occupations in 2022 compared to last year, MOM said.

Among PMETs, the unemployment rate fell from 3.4 per cent to 2.6 per cent. For non-PMETs, the unemployment rate fell from 5.1 per cent to 4.4 per cent.

MOM said that the long-term unemployment rate also decreased to around pre-pandemic levels for both PMETs and non-PMETs.

For PMETs, the rate fell from 0.8 per cent to 0.5 per cent, while non-PMETs saw a drop from 0.9 per cent to 0.7 per cent.

The ministry defines long-term unemployed individuals as those aged 15 and older who have been unemployed for 25 weeks or more.

MOM also found that a higher share of Singapore residents are now working in PMET roles.

"In terms of job profile, PMETs made up 64 per cent of all employed residents in 2022, an increase from 62 per cent in 2021," it said.

"The higher share reflects a highly educated workforce and sustained employment growth in sectors such as information and communications, financial and insurance and professional services."

MOM said that other indicators on labour underutilisation had also improved to pre-pandemic levels.

"The number and incidence of discouraged workers continued to decrease from 11,600 or 0.5 per cent of the resident labour force in 2021, to 8,900 or 0.4 per cent in 2022, reflecting a strong recovery from the height of the pandemic in 2020," it said.

"Alongside improvements in job search outcomes, the resident time-related underemployment rate declined to pre-COVID levels, at 3.0 per cent in 2022.

"Most groups experienced improvements, including those who were more affected at the height of the pandemic - workers aged 60 and over as well as those with below secondary qualifications."

Time-related underemployed individuals are those aged 15 and older who normally work less than 35 hours a week but are willing and available to engage in additional work.

With Singapore's economic recovery, the scaling back of temporary jobs related to COVID-19 and the tight labour market, the proportion of employees in non-permanent employment also fell back to a pre-pandemic level of 11 per cent, MOM added.

INCOME GROWTH HOLDS UP

Real median income growth improved from 0.9 per cent in 2021 to 2.1 per cent in 2022, as strong nominal income growth outstripped higher inflation, MOM said.

"However, real median income growth in 2022 was still lower than that in the years preceding the pandemic, when inflation was lower," the ministry added, noting that this figure was 3.8 per cent per annum from 2014 to 2019.

Income growth for lower-wage workers was stronger in 2022 compared to that of the median worker, boosted by tripartite initiatives such as the Progressive Wage Model (PWM).

Real income for the 20th percentile worker grew by 4.8 per cent in 2022, faster than the previous year's 4.4 per cent, and the 4.4 per cent per annum figure seen in the pre-pandemic years from 2014 to 2019, MOM said.

The ministry said that the Government will continue to build on tripartite efforts to uplift lower-wage workers.

"These include new Progressive Wage moves introduced since Sep 1, 2022, namely the new Local Qualifying Salary (LQS) requirement, and the introduction of PWM for retail workers as well as for in-house cleaners, security officers and landscape workers," MOM said.

"More lower-wage workers will also benefit from the Food Services PWM and Occupational PWM for administrators and drivers to be implemented from March 2023."

MOM also highlighted that the Government is co-funding the wage increases given to lower-wage workers through the Progressive Wage Credit Scheme from 2022 to 2026.

"Employers are urged to use this period of support from the Government to accelerate firm-level productivity improvements, so that wage increases remain sustainable in the long run," the ministry said.

The Labour Force in Singapore Advance Release 2022 report used field work from the mid-year Comprehensive Labour Force Survey and analysed a broad range of labour market indicators including employment rate and income growth. This data is not covered in MOM's quarterly labour market reports.

A total of 26,183 households responded to this year's survey, with field work taking place from Apr 25 to Jul 31.