Huge wage growth this year?

News 5 Tonight,  Saturday, 4th June 2011

SINGAPORE: Observers said there was a “gulf of discrepancy” last year, between Singapore’s economic growth and workers’ salaries.

Despite the economy growing 14.5 per cent last year, data from the Ministry of Manpower released recently, showed nominal wages grew just 5.5 per cent.

The inflation rate last year was 2.8 per cent.

When that’s factored in, real wages dipped to just 2.7 per cent in 2010.

Some human resource practitioners said the picture is not likely to change this year.

Primestaff Management Services managing director Ronald Lee said: “For 2011, very much will depend on the inflation again, because the consumer price index is projected to grow, maybe for the year, about four per cent.

“So, at four per cent, if you want to maintain a real wage increase of 2.7 per cent or more, then you need to provide a nominal wage increase of maybe seven, or 7.5 per cent even”.

But labour economists said they think real wages could actually go up, even “going off the chart”.

In April, the National Wages Council recommended workers be rewarded with wage increases this year.

This is in keeping with the strength of Singapore’s economy and the performance and prospects of companies’.

The council also suggested bosses consider a one-off special lump-sum payment to help employees cope with inflation.

Whether wages will rise by a lot more this year, one thing is certain.

Wages of employees in sectors such as financial services, manufacturing, hospitality, IT and communications could go up by more than average due to heavy demand for such workers.

Another sector is construction, following the government’s announcement to ramp up the supply of public housing