Faster growth in low-wage workers’ income in past 5 years

SINGAPORE — Low-wage workers have seen their incomes grow faster in the past five years than in the previous five years, latest figures from the Manpower Ministry show.

Wages at the 20th percentile of full-time employed residents rose by 31 per cent from S$1,500 in 2009 to S$1,972 this year — a growth of 2.3 per cent per year after adjusting for inflation.

This was higher than the 0.7 per cent real growth per year from 2004 to 2009.

The higher growth was due to ongoing initiatives to raise the incomes of low-wage workers, said the ministry. Recent efforts include recommendations by the National Wages Council (NWC) for employers to give a minimum monthly increment for workers earning a basic salary of up to S$1,000 a month.

The NWC recommended an increment of S$50 in 2012, and S$60 this year and last year.

However, growth in real median income over the recent five years has slowed relative to 2004 to 2009. Weighed down by higher inflation over this period, real median income grew 1.9 per cent per year from 2009 to 2014, compared with 2.5 per cent per year from 2004 to 2009.

“There was a sustained rise in median income over the recent five years, even though growth varied from one year to another,” said the ministry.

Overall, the nominal median monthly income for full-time resident workers increased to S$3,770 from S$3,705 last year — a 0.4 per cent increase in real median income after adjusting for inflation.

Other recent efforts to boost the incomes of workers include the Progressive Wage Model.

Introduced by the Government in 2012, it is now adopted by nearly 270 unionised firms. The model allows workers to pocket higher wages as they upgrade their skills and improve their productivity.

Noting these efforts, UOB economist Francis Tan said wages of low-income workers would continue to rise, helped by the labour crunch.

“We may see low-wage jobs no longer becoming low-wage,” he said, adding that work such as carpentry and plumbing, for example, pays much higher wages in developed countries than in the past.