So the Ministry of Manpower’s report on 2015’s Wage Practices is out. Wages increased at a slower pace in 2015. And this was due to firms being less profitable in 2015 because of the softer economic conditions.
Nominal wages grew in the private sector by 4% in 2015, lower than 4.9% the year before. However, real wages, including employer CPF contributions, rose by 5.4%, compared to 3.9% the year before.
Well, this might be good news to some, because it means you get to take back a little more salary and you probably have a little bit more disposable income to spend.
But, here’s the not-so-good thing inflation, fell to -0.5% in 2015 compared to 1% in 2014.
You might ask: “what’s so bad about negative inflation?”. Looks good at first glance, because it means prices won’t be rising.
But negative inflation, otherwise known as deflation, can lead to unemployment because companies make less money. And what results form this is the cutting of costs in order to survive. This include shutting of stores, plants, warehouses and retrenchment of workers.
Then comes the vicious cycle of decreased spending, leading to decrease in demand and more deflation.
And in the same Wage Practice Report 2015, firms were less profitable last year and fewer companies gave wage increases compared to the previous year.
So those of us who received a wage increase last year should be content with what we got.
But how do we hold on to our jobs and continue to have real wage increase?
Through skills upgrading and training, and through the use of technology.
The economy will continue to soften for some time. And retrenchments will surely increase in certain industries.
So it’s best if Singaporeans can tap on some of the initiatives to up-skill, re-skill or second-skill.
Programmes such as the SkillsFuture initiatives as well as the WorkPro and the Adapt & Grow are just some of the government’s initiatives to help working people keep their skills relevant and to make themselves more employable.
Even if you want to make mid-career switch, there is the Professional Conversion Programme.
The labour movement too, has introduced a $200 million NTUC-Education and Training Fund (NETF) to provide its union members with subsidies to upgrade their skills at suitable Institutes of Higher Learning.
At this year’s May Day Rally, Prime Minister Lee Hsien Loong highlighted that there is deep and structural changes in our economy that is driven by globalisation and technology. ” It is affecting many countries, not just Singapore,” he said.
So in order for us to maintain our wage growth in the coming years, it is important that our working people jump on the bandwagon and create opportunities and not wait for them.
“Our challenge is how do we keep Singapore growing so that our economy can continue to generate good jobs for Singaporeans?…The only way to do that is to transform the economy, create new opportunities and opportunities not just to earn a pay, but to upgrade ourselves so that we can do more challenging jobs.” – Prime Minister Lee Hsien Loong