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SINGAPORE : Total wages of private sector employees fell by 0.4 per cent last year.
According to the Ministry of Manpower's (MOM) latest publication "Report on Wages 2009," the decline followed a 4.2 per cent increase in wages in 2008.
The decline was due to a drop of 14 per cent in bonus paid out. The bonus amount paid out fell to 1.99 months last year from 2.31 months in 2008.
Dr Randolph Tan, head, Business Analytics Programme, SIM University, said: "Every time you have a recession, basically you have a weakening in labour market demand. So, it's quite natural that the wages will come down.
"I think what is interesting is that the proportion of the decline is really not as significant as we'd seen in previous downturns."
However, the report said basic wages still rose by 1.3 per cent, but was significantly lower than the 4.4 per cent rise in 2008.
During the recession, the government introduced the Resilience Package, which included the Jobs Credit scheme. This helped cushion the wage cuts.
While real total wages dropped 1.0 per cent last year, MOM said the decline was less than the contraction in labour productivity (-3.9 per cent).
As a reflection of both the recession and weak productivity performance in recent years, labour productivity contracted 3.8 per cent per annum while wages grew slightly over the last three years from 2006 to 2009.
Nevertheless, over the longer period since the last recession in 2001, gains in real wages still lagged productivity growth.
As at December 2009, a large majority or 85 per cent of the workforce in the private sector were employed in establishments that had some form of flexible wage system. That's up marginally from 84 per cent in 2008.
Large establishments with at least 200 staff continued to lead in the implementation. However, more SMEs are also adopting the flexible wage system - 79 per cent in 2009, compared to 75 per cent the previous year.
David Ang, executive Director, Singapore Human Resources Institute, said: "The smaller businesses and so on, they do not have a very good HR structure in place, but with the simple features of the flexi-wage system that we have, small businesses and the SMEs can easily use the principles behind this flexi-wage system to reward their employees and also to ensure that their business costs in terms of manpower and wages can be regulated."
Having a narrow maximum-minimum salary ratio remained the most widely adopted recommendation by the private sector. This was followed by linking variable bonus to Key Performance Indicators and incorporating the Monthly Variable Component in the wage structure.
With many establishments having restructured their wage system to tie wages more closely with business performance, the wage changes were correlated with business profitability.
The more profitable private establishments gave small total wage increases while the less profitable and the loss-making establishments cut wages in 2009.
Other findings showed that managers brought home the highest median monthly gross salaries of S$6,300 as at end June last year, followed by professionals (S$4,375) and associate professionals & technicians (S$2,940).
Clerical workers (S$1,918) and sales & service workers (S$1,786) were paid less.
Reflective of the wage premium paid for skills and craftsmanship among the blue-collar workers, production craftsmen (S$2,150) and plant & machine operators (S$1,809) were paid more than the cleaners, labourers & related workers (S$1,000).
The report also said wages tend to increase with age as workers gain experience and become more productive over the years. This is reinforced by the seniority-based wage system in some companies.
Last year, the pace of wage increase with age was more pronounced among the managerial and professional groups reflecting the knowledge-intensive nature of their work.
The wages of non-PMET groups rose more gradually, reaching their peaks in their late thirties and forties.
On the other hand, wages of the group of cleaners, labourers & related workers started to decline from their thirties onwards. MOM said advancing age works against workers in manual occupations, given the physical nature of the job.
Higher value-added industries tend to pay better. Professional services and information & communications were among the top three highest-paying industries for many occupational groups in 2009.
On the other hand, hotels & restaurants were consistently among the lower-paying industries.
Females typically earned less than males, similar to the experience in other countries. MOM said the gender differential was substantially smaller in white-collar than blue-collar occupations.
The gender wage gap also increased with age, given the tendency for women to disrupt their careers to take care of their family.
In fact, within the younger age group of 25-29, females earned more than males in many white-collar occupations. - CNA /ls/al
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