(Photo: TODAY/lli Nadhirah Mansor)

SINGAPORE: Employment rates in Singapore dipped and real incomes fell in 2023 amid a weak economic environment and high inflation, according to the advance release of the Ministry of Manpower's (MOM) labour force report on Thursday (Nov 30).

The ministry said Singapore's labour market has remained resilient, adding that while real income growth for the rest of 2023 is likely to remain negative, there should be an improvement next year with inflation easing.

The employment rate for residents aged 15 and over declined to 66.2 per cent in 2023 from last year’s historical high of 67.5 per cent.

"As indicated by the low unemployment rate, the reason for its decline over the year was due to more of them staying outside the labour force instead of difficulties with seeking employment," said the report.

Singapore’s employment rate still ranked fourth among the Organisation for Economic Co-operation and Development (OECD) countries.

"As a result of policies aimed at encouraging women to return to the workforce and improving the employability of older workers, Singapore has consistently maintained its high ranking over the decade despite an ageing workforce," the report added.

This year, the unemployment rate and long-term unemployment rate improved for professionals, managers, executives and technicians (PMETs) and non-PMETs.

The unemployment rate for non-PMETs fell from 4.4 per cent in 2022 to 3.6 per cent this year. For PMETs, it fell from 2.6 per cent last year to 2.4 per cent this year.

Long-term unemployment rate for non-PMETs fell from 0.7 per cent last year to 0.5 per cent in 2023. For PMETs, it fell from 0.5 per cent last year to 0.4 per cent.

The ministry defines long-term unemployed individuals as those aged 15 and older who have been unemployed for 25 weeks or more.

INCOME

Nominal income continued to rise this year, but at a more moderate pace compared with most years in the last decade, said MOM.

The median gross monthly income from employment of full-time employed residents was S$5,197 (US$3,900), a 2.5 per cent increase from 2022.

This increase was lower than the annualised average rate of increase from 2013 to 2023, which was 3.4 per cent.

At the 20th percentile, nominal income was S$2,826, a 1.7 per cent increase from last year. This is lower than the 4.1 per cent per annum increase from 2013 to 2023.

Singapore saw inflation rise to a 14-year high in January and February this year – with core inflation hitting 5.5 per cent – before trending downwards.

After adjusting for inflation, real income at the median fell 2.3 per cent this year.

For those at the 20th percentile, real income fell 3 per cent. After accounting for Workfare Income Supplement and related payments, real income at the 20th percentile saw a smaller decline of 2.1 per cent.

The decline in 2023 has dampened gains from 2018 to 2023 compared with the period from 2013 to 2018.

However, over the longer-term, real income growth for the 20th percentile worker still outpaced that of the median worker, due to measures to uplift lower-wage workers, said MOM.

"As a result, the gap in income between the (20th percentile) and (median) worker has narrowed,” said MOM.

The ministry added: "Economic headwinds will continue to weigh on the labour market going forward. The government encourages employers and workers to make full use of available programmes to remain competitive and resilient amidst economic uncertainty."

Cna. (2023, November 30). Singapore’s resident employment rate dips in 2023; real income falls: MOM. CNA. https://www.channelnewsasia.com/singapore/employment-rate-dipped-2023-real-income-falls-mom-labour-report-advance-release-3955686