SINGAPORE — Middle-income workers in Singapore have seen the most significant salary growth compared to other income groups over the past decade, according to a recent report by the Monetary Authority of Singapore (MAS).
The biannual Macroeconomic Review, released on Monday (30 Oct), revealed that from 2011 to 2021, the incomes of these workers, referred to as the “broad middle”, increased by 42%. This surpassed the 36% growth observed among earners in both lower and higher brackets.
The “broad middle” category encompasses Singapore resident employees ranging from the 21st to the 80th income percentiles within their five-year age cohorts. Remarkably, during this period, almost half of these workers witnessed an upward trajectory in their earnings. Specifically, 45% of them ascended by at least one income decile, while 23% advanced by two deciles or more. In contrast, between 20 to 25% maintained their income decile, and the remaining workers experienced a decline.
The report states that a significant driver for salary augmentation among the middle-income bracket was the shift of workers to larger and more productive firms. Those who made this move experienced their incomes doubling over the decade, whereas their counterparts in smaller or less efficient firms observed a moderate growth of about 50%.
Education also played a pivotal role, said the report. While most middle-income workers remained within the same educational bracket between 2011 and 2021, those who pursued further studies saw a more substantial rise in their average incomes.
Despite these positive growth figures, MAS pointed out the deceleration in Singapore’s economic growth rate, which averaged 3.7% annually from 2011 to 2022, down from 5.9% in the preceding decade. Predictions suggest a continued slowdown in the upcoming decade due to demographic challenges, including an aging population and declining birth rates.
The central bank also highlighted potential “structural shifts” that could impact the jobs and incomes of middle-income workers. Technological advancements, especially in generative artificial intelligence (AI), could either bolster job opportunities or cause job losses, depending on how businesses utilize these technologies and whether workers possess the requisite skills.
Emphasizing the importance of adapting to these technological shifts, MAS stated, “The income growth of the broad middle is tied to the corporate sector’s adeptness at leveraging technology and scaling in a dynamic economy. Moreover, a collaborative effort is required to reskill and upskill workers, preparing them for more productive and lucrative roles.”
Regarding the future labour market, MAS anticipates a slowdown in labour demand in upcoming quarters. However, the authority remains optimistic about sustained hiring within the domestic-oriented services and travel-related sectors.
Notably, during the period of MAS’ analysis, Singapore granted over 220,000 new citizens and more than 338,800 permanent residents (PRs). The employment statistics for residents encompass both citizens and PRs. The resident labour workforce witnessed an increase from 2.08 million in 2011 to 2.4 million in 2021.
An earlier parliamentary response highlighted that the median gross monthly income of residents typically surpasses that of Singapore Citizens, as PRs usually demonstrate strong employability prior to obtaining residency.
This raises the question: Have the wages of the average middle-income Singaporean genuinely increased, or has the influx of new citizens and PRs potentially skewed the data upwards? This situation may present a misleadingly positive depiction of the financial advancement of Singaporeans over the past decade.
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