SINGAPORE: Real incomes for Singapore’s residents have risen in 2024, driven by higher wages and easing inflation, according to the Ministry of Manpower (MOM) in its latest labour force report released on Thursday (28 November).
This marks a reversal following last year’s struggles with higher inflation and more modest income growth.
Residents refer to those who are either citizens or permanent residents.
Real incomes, which account for the effects of inflation, are a key indicator of an individual’s purchasing power.
For the first time in several years, the growth in real income outpaced inflation, reflecting both a rise in nominal wages and a slowdown in the rate of inflation.
Increase in Nominal Income
According to the MOM’s advance labour force report, nominal wages for Singapore residents saw a notable increase in 2024.
The median gross monthly income rose from S$5,197 (US$3,880) in 2023 to S$5,500 in 2024, marking a 5.8 per cent increase.
This is a marked improvement compared to the 2.5 per cent growth recorded in the previous year.
For those in the lower income bracket, at the 20th percentile, nominal income also experienced a significant boost, climbing by 7.1 per cent from S$2,826 in 2023 to S$3,026 in 2024.
This is a recovery compared to the1.7 per cent increase recorded from 2022 to 2023, further highlighting the improving economic conditions.
Real Income Growth
The combination of increased nominal incomes and a more stable inflation rate led to an overall rise in real incomes in 2024.
Real incomes at the 20th percentile grew by 4.6 per cent, a stark contrast to the 3 per cent decline experienced in 2023.
Meanwhile, median real incomes rose by 3.4 per cent, recovering from a 2.2 per cent contraction last year.
Mr Ang Boon Heng, Director of the Manpower Research and Statistics Department, commented on the broader trend of income growth.
“In fact, we see a broad-based increase across all deciles, so it’s not just these two groups that we are focusing on,” he said.
He further noted that the real income growth in 2024 closely mirrors the average growth rates seen before the COVID-19 pandemic, when inflation was lower.
The ministry also pointed out that income growth at the 20th percentile has outpaced the growth at the median income level, a positive sign that income inequality is beginning to narrow.
“This was supported by initiatives that aim to uplift lower-wage workers, such as the Progressive Wage Model and the National Wage Council’s recommendations on wage increases for lower-wage workers,” said Mr Ang.
Lower-Wage Workers to Benefit from Future Income Growth
MOM emphasized that lower-wage workers can expect continued income growth in the coming years.
However, it noted that wage increases are still outpaced by productivity gains.
The government’s efforts to raise the wages of lower-income workers have been supported by measures such as the Progressive Wage Model, which sets a minimum wage for workers in certain sectors, and other initiatives designed to boost the income of low-wage earners.
Positive Outcomes for Industry Switchers
In its report, MOM also highlighted a growing trend of workers transitioning between industries, with many seeing positive employment outcomes.
Those who switched industries, particularly between the ages of 25 and 64, saw income increases.
The majority of these workers found higher-skilled positions in sectors such as financial and insurance services, information and communications, and professional services.
MOM’s data revealed that nearly 60 per cent of workers who switched industries in 2024 earned at least 5 per cent more after adjusting for inflation.
Around 20 per cent of these workers earned about the same amount as they did before making the transition. However, approximately 20 per cent of industry switchers saw their real income decline by at least 5 per cent.
This trend indicates that career transitions, particularly into higher-skill sectors, are proving to be financially rewarding for many workers.
Over the past decade, more residents have been moving into these more productive and higher-paying sectors, contributing to the overall improvement in real incomes.
Unemployment rates for PMETs increase slightly
The overall employment rate for residents aged 15 and above was 66% in 2024, slightly down from 66.2% in 2023 and 67.5% in 2022.
Meanwhile, the unemployment rate for Professional, Managerial, Executive, and Technical (PMET) workers rose marginally to 2.7% in 2024, up from 2.4% in the previous year.
The long-term unemployment rate also increased, rising from 0.4% in 2023 to 0.7% in 2024.
For non-PMET workers, the unemployment rate decreased to 3.4% in 2024.
However, some industries experienced notable increases in unemployment rates.
The information and communications sector saw unemployment rise from 3.8 per cent in 2023 to 5 per cent this year, while the financial and insurance services sector recorded an increase from 3 per cent to 3.8 per cent.
MOM attributed these rises to retrenchments stemming from global economic headwinds and business restructuring.
Unemployment rates also edged higher in sectors like manufacturing, accommodation, and administrative and support services.
Time-Related Under-Employment Rate Steady at 2.3%
The MOM report also highlighted that the resident time-related under-employment rate held steady at 2.3% in 2024, a significant improvement from 3.4% in 2014, particularly among seniors and the less educated.
The tightening labour market, coupled with initiatives like the Progressive Wage Model, has lessened the need for lower-wage workers to take on extra hours.
However, certain sectors, including Professional Services and Administrative Support, experienced a slight rise in time-related under-employment, though these rates remain below historical averages.
