In traditional economics, a low unemployment rate typically leads to higher wages. This makes intuitive sense—companies must offer higher salaries when fewer people are unemployed to attract the talent they need.
However, recent graduate employment data appears to contradict this conventional wisdom. According to the 2024 Graduate Employment Survey, fresh university graduates find it harder to secure full-time permanent jobs. The percentage of graduates who secured such roles fell from 84.1% in 2023 to 79.5% in 2024. Interestingly, despite this decline in employment rates, those who did find full-time jobs earned higher salaries. The median gross monthly salary rose from $4,317 in 2023 to $4,500 in 2024.
One possible explanation is that rising wages are not necessarily a sign of increased demand for labour but rather the result of higher salary expectations from workers. This concept is similar to how minimum wages function—when wages rise, companies may reduce their hiring to control costs.
While Singapore does not have a universal minimum wage (and progressive wages are specific to sectors and hardly applicable to fresh graduates), graduates’ salaries have risen significantly in recent years, likely due to inflation and higher wage expectations. However, this salary increase has not necessarily translated into better job security.
For example, Arts, Design & Media graduates saw their gross monthly median salary rise from $3,500 in 2022 to $3,800 in 2024. Yet, full-time permanent employment for graduates in this field declined from 72.7% in 2022 to 60.9% in 2024. In other words, while salaries increase, securing a job is becoming more challenging.
Are Employers Becoming More Selective?
A rise in unemployment may also indicate that companies are becoming more selective in their hiring, especially for full-time permanent roles. Two main factors could drive this selectivity:
Cost-cutting measures: Many large companies in Singapore have been implementing layoffs, reflecting broader efforts to manage costs. In the IT sector, for example, where we have seen many tech companies reducing their headcount, the gross monthly median salary increased only slightly—from $5,500 in 2022 to $5,600 in 2025. Yet, full-time permanent employment in the field dropped significantly from 92.8% to 83.5%.
Stricter hiring criteria: When salaries are high, companies may only hire candidates who perfectly match their needs. Business graduates, for instance, saw their average salary increase from $4,044 in 2022 to $4,400 in 2024. Yet, securing a full-time job has become more difficult for these graduates, with the employment rate dropping from 91.0% in 2022 to 84.4% in 2024.
The Trade-Off: Higher Salaries But Fewer Jobs
The data and trend suggest that fresh graduates may need to weigh the potential trade-off between rising wages and job availability. While fresh graduates can expect to earn more, securing a full-time position has become more competitive.
Rising salaries can be a positive development, but they must be accompanied by an increase in skills and value-added contributions in the workplace. If wages continue to rise without a corresponding boost in productivity, companies may hesitate to hire or become increasingly selective in their hiring decisions. This could lead to fewer job opportunities, particularly for fresh graduates who may not have the experience or skills that justify higher salaries.
Ultimately, sustainable wage growth must be tied to improved productivity—without this balance, businesses and job seekers may struggle to find the right opportunities in a shifting employment landscape.
Read Also: Are Singapore Workplaces Ready For Gen Z Workers?
Photo Credit: iStock/Jacob Wackerhausen
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