{"id":9789,"date":"2022-12-04T08:00:00","date_gmt":"2022-12-04T00:00:00","guid":{"rendered":"https:\/\/dollarsandsense.sg\/business\/?p=9789"},"modified":"2022-12-04T00:23:48","modified_gmt":"2022-12-03T16:23:48","slug":"real-median-income-increased-2-1-in-2022-despite-inflation-why-employers-have-a-challenging-time-as-the-labour-market-recovers","status":"publish","type":"post","link":"https:\/\/dollarsandsense.sg\/business\/real-median-income-increased-2-1-in-2022-despite-inflation-why-employers-have-a-challenging-time-as-the-labour-market-recovers\/","title":{"rendered":"Real Median Income Increased 2.1% In 2022 Despite Inflation: Why Employers Have A Challenging Time As The Labour Market Recovers"},"content":{"rendered":"\n

As employees adjust to our back-to-office routines, employers are also adapting to the changing labour market. The recent spate of layoffs from various major tech companies including Shopee and Carousell may have also cast a gloom over our employment outlook. However, according to the advance release of the Labour Force In Singapore 2022<\/a>, most of our labour force indicators have returned to or are performing better than pre-COVID levels. Notably, despite the rising inflation, real median income increased by 2.1% in 2022.<\/p>\n\n\n\n

Here\u2019s what employers need to know about the current labour market conditions and how Singapore\u2019s resident labour market is recovering from the pandemic.<\/p>\n\n\n\n

Read Also: Singapore\u2019s Unemployment Falls To A 6-Year Low But Is The Labour Market As Rosy As It Seems?<\/a><\/em><\/strong><\/p>\n\n\n\n

Real Median Income Has Increased By 2.1% Even As Inflation Rises<\/strong><\/h3>\n\n\n\n

One good news for employees is the fact that their wage increases are not eroded by the rapidly increasing inflation in 2022.<\/p>\n\n\n\n

For full-time employed residents (Singapore Citizens and Permanent Residents), the nominal median income increased by 8.3% from $4,680 in 2021 to $5,070 in 2022. This is a faster rate of increase compared last year\u2019s 3.2%. Even after accounting for inflation, the median income increase of 2.1% is higher than 0.9% in 2021.<\/p>\n\n\n\n

While income growth has managed to keep pace (and stay slightly ahead of inflation, this 2.1% real median income increase is still lower than the pre-pandemic years. During this period when inflation was lower, the real median income growth was 3.8% p.a. between 2014 to 2019. Thus, the most important employment indicator to employees isn\u2019t fully out of the woods yet. For employers, the effect of inflation may make the heftier wage increases less impactful for your employees.<\/p>\n\n\n\n

Lower Wage Workers Have The Highest Wage Increase<\/strong><\/h3>\n\n\n\n

Encouragingly, the gap between lower wage workers (indicated by the 20th percentile of income) and median incomes has narrowed.<\/p>\n\n\n\n

In 2022, real income at the 20th percent (lower wage workers) increased at 4.8% compared to 2.1% for real median income. This increase is higher than the 4.4% in 2021 and the 4.4% p.a. increase during the pre-pandemic years of 2014 to 2019.<\/p>\n\n\n\n

This is likely due to the Progressive Wage Model (PWM) measures that supported the uplifting of lower-wage workers. In 2022, workers in the lift and escalator maintenance sector and retail sector were covered under the PWM while the PWM was extended for the cleaning, security and landscape sectors.<\/p>\n\n\n\n

As the PWM is extended to the food services sector, waste management sector and occupations (administrative assistants and drivers) in 2023, we can expect that real wage increases will continue to be sustained for lower wage workers.<\/p>\n\n\n\n

Read Also: Progressive Wage Model: How Much Will Singapore Employers Have To Pay Their Workers<\/a><\/em><\/strong><\/p>\n\n\n\n

As for lower wage workers not covered by the PWM, the National Wage Council<\/a> recommends that:<\/p>\n\n\n\n