Here's why recent real wage growth is lower compared to a decade ago

Total real wage growth in 2021 was at 1.6%—less compared to 2010'2 2.7%.

The salary hike, which was dampened by higher inflation, could possibly be due to “cautious” employers amidst the uncertain factors in the global economy, UOB said in its May 2022 market overview report.

Based on the figures from the Ministry of Manpower (MOM), 2021’s total real wage growth of 1.6% was lower than 2010's 2.7%.

This is slightly above the 1.4% wage hike in 2020; but the MOM still described this as a slow increase for salary hike.

"After the global financial crisis, total wage growth rebounded the following year in 2010 to 5.7%, whilst in 2021's total wage growth was lower than in 2010, suggesting that employers may have been 'more cautious given the longer tail' of the COVID-19 pandemic," UOB said quoting MOM.

"Downside risks to the global economy remain, such as the ongoing Russia-Ukraine conflict and protracted global supply disruptions, and MOM said this could moderate demand and nominal wage growth."

The total wage growth, including employer Central Provident Fund contributions, rebounded 3.9% in 2021, comparable to pre-pandemic levels.

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Ministry of Manpower

UOB

Salary Report

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