Report on Wages in Singapore, 2007 and Singapore Yearbook of Manpower Statistics, 2008
Reflecting the premium on skills and knowledge, jobs requiring professional and specialised training continued to command higher salaries in 2007. Wages were also commonly observed to rise with age, especially for occupations at the higher end. The link between age and earnings was less obvious for the lower skilled and blue-collar occupations whose wages rose slightly with age and peaked early in their thirties.
2. These are some of the findings of the `Report on Wages in Singapore, 2007' published by the Ministry of Manpower's Research and Statistics Department. The 210-page Report provides information on salaries of over 300 occupations as well as wage changes and bonuses paid in various industries. It also includes information on the extent to which employers have restructured their wage systems. The key findings of this Report are summarised in the Annex.
3. The department has also published the ‘Singapore Yearbook of Manpower Statistics, 2008'. This 185-page Yearbook provides a wide range of statistics on the labour market situation. These include key data on labour force, job vacancies, wages, labour turnover, hours worked, employment conditions, labour relations, retrenchments, workplace injuries, higher education and skills training.
4. The information provided in these two publications can help job seekers, employers and employees make informed decisions on career and human resource matters. The publications also enable analysts to gain a better understanding of the Singapore labour market.
5. The two annual statistical publications can be downloaded from the Ministry of Manpower's website.
KEY FINDINGS OF REPORT ON WAGES IN SINGAPORE, 2007
• Reflecting the premium on skills and responsibilities, managers received the highest median gross monthly wages at $6,101 in June 2007. This was followed by professionals at $4,030. The third highest paid was the group of associate professionals & technicians at $2,789. Clerical ($1,932) and sales & service workers ($1,851) were paid close to $2,000. Among blue-collar occupations, the production craftsmen ($2,110) were paid more than plant & machine operators ($1,780). The lowest paid was the group of cleaners, labourers & related workers with a median gross pay of $968.
• Wages were commonly observed to rise with age, especially for occupations at the higher end. The pace of wage increase with age was more pronounced with the managerial and professional groups. The link between age and earnings was less obvious for the lower skilled and blue-collar occupations. Their wages rose slightly with age and peaked early in their thirties. Thereafter, advancing age appeared to work against them as wages typically declined, given the “physical” nature of their jobs.
• Amid the strong economic performance and tight labour market, total wages rose by a 7-year high of 5.9% in 2007, up from 4.5% in 2006. The total wage increase of 5.9% resulted from a basic wage gain of 4.3% and an increase in bonus payout (also known as annual variable component) from 2.18 months in 2006 to 2.36 months in 2007. The rise in annual variable component accounted for 2.3% point of the 5.9% total wage increase. The remaining 3.6% point came from the increase in basic wages, which accounted for 61% of the total wage gain in 2007, lower than 69% in 2006.
• Labour productivity contracted by 0.9% in 2007 after experiencing slowing growth in the preceding two years. After adjusting for higher inflation, real total wages rose by 3.8% and real basic wages by 2.2%. Consequently, real wages outpaced productivity growth in 2007 for the third consecutive year. To minimise cyclical effects, productivity trends are often analysed over a longer period, preferably over the course of a business cycle. Over a longer period of five years or more, the growth in productivity had kept pace with gains in wages.
• As at December 2007, 84% of the workforce in the private sector was under some form of flexible wage system1, up slightly from 83% a year ago but significantly higher than 76% in June 2004 when the data was first collected. Large establishments (employing 200 or more employees) continued to lead in the implementation, with the vast majority (89%) of their workforce having at least one key wage recommendation in their wage system. Although the share was lower at 77% in small and medium enterprises (SMEs employing 25-199 employees), this was a significant progress from 73% in December 2006 and 63% in June 2004.
• The more common recommendation adopted by the private sector was in having a narrow maximum-minimum salary ratio, followed by linking variable bonus to Key Performance Indicators (KPI). In December 2007, 62% of employees were working in establishments that had narrowed/were narrowing the wage ratio for the same job to 1.5 or less and 52% were in establishments that had variable bonus linked to KPI. The proportion of workforce employed in establishments with Monthly Variable Component (MVC) in their wage structure was lower at 35%, after declining slightly from 37% the year before, amid the churn in companies. Both the larger and unionised establishments continued to lead in adopting each of the three recommendations.
• In 2007, more private establishments (18%) that employed low wage workers adopted the National Wages Council's recommendation to pay higher wage increases to these employees, compared with 16% in 2006 and 15% in 2005. The practice was more prevalent for unionised (40%) than non-unionised (17%) sector, with the former (+7.3% point) also experiencing a higher increase over the year than non-unionised (+1.6% point) establishments.
Establishments are considered to have some form of flexible wage system when their wage structure incorporates at least one of the following key wage recommendations :
(i) implement variable bonus linked to Key Performance Indicators (KPI);
(ii) introduce the Monthly Variable Component (MVC) in wage structure; and
(iii) narrow the maximum-minimum salary ratio for the majority of their employees to an average of 1.5 or less.