According to preliminary estimates released on November 7, 2023, Singapore’s real median income fell by 4.5% in the first half of the year compared to the same period in 2022. Senior Minister of State for Manpower Zaqy Mohamad attributed this decline to elevated inflation and a less favorable economic outlook.

The decrease in real incomes has impacted workers in various job sectors, as inflation has consistently outpaced wage increases. In contrast, nominal median income—unadjusted for inflation—grew by approximately 0.9% year-on-year during the same timeframe. This data pertains to Singaporean citizens and permanent residents in full-time employment.

While workers at the 20th income percentile experienced real income growth of 2.9% per year from 2017 to 2022, those at the median saw a less pronounced increase. Over the same period, real median income had risen by 9.4%, averaging 1.8% annually.

Looking ahead, Zaqy indicated that inflation is projected to moderate for the remainder of 2023, which may help stabilize the decline in real incomes. However, nominal wage growth for resident workers is anticipated to ease in 2024 as labor demand cools, although certain sectors, such as travel-related industries and labor-intensive services, may continue to see robust wage increments.

To assist workers facing rising living costs, the National Wages Council has recommended that employers provide a one-time special lump sum payment to employees. Furthermore, the government has introduced additional cash payouts for eligible Singaporeans as part of a S$1.1 billion Cost-of-Living Support Package.

Zaqy emphasized the importance of upskilling and reskilling middle-income and lower-middle-income workers to enable them to transition to new roles in growing sectors. For lower-income workers, the Progressive Wage Model is already in place in several industries, linking minimum pay increases to training and productivity enhancements.

Zaqy also stressed the necessity for companies to innovate and redesign jobs to ensure that wage increases are matched by productivity gains, cautioning that failing to do so could pose challenges for both businesses and the economy as a whole. He highlighted various government initiatives aimed at facilitating job transformations and providing support for career changes, as well as enhancements to the Workfare Income Supplement Scheme to improve the earnings of lower-wage workers.