Zakir Hussain
Jun 17, 2008
The Straits Times
WAGES here (Singapore) have risen by close to 11 per cent, the highest in almost a decade.
But the impact of soaring food and fuel prices meant that for employees in manufacturing, transport and administrative jobs, their real wages - pay minus the effect of inflation - actually fell.
The Manpower Ministry's labour market report for the first quarter, released yesterday, is the first set of official figures to show the impact of inflation, at a 26-year high of 6.6 per cent, on the wage increases that workers across different sectors received.
And with annual inflation forecast at 6 per cent this year, analysts were not entirely optimistic.
National University of Singapore labour economist Park Cheolsung said it is a matter of time before real earnings dip for those in other sectors.
The report noted that on average, real earnings grew by 3.6 per cent compared to the same three-month period last year.
Workers made $4,316 a month on average this quarter. But after adjusting for inflation, they effectively earned $3,982.
This monthly figure is derived from an average of all full-time and part-time CPF members.
Rising global prices of food and fuel saw the consumer price index rise by 6.6 per cent in the first three months of this year.
The Government rolled out help schemes for the needy and the strong Singapore dollar is helping maintain purchasing power. The National Wages Council also asked firms to give one-off bonuses to help rank-and-file workers cope with inflation.
Still, Prime Minister Lee Hsien Loong has said the best way to manage rising prices is to grow the economy so real incomes outpace inflation.
But for now, salary consultant Peter Lee is not optimistic real earnings can do so. 'Nobody can control inflation, and most employers cannot adjust wages to fight it,' said the managing consultant of RDS Remuneration Data Specialists.
His firm's recent survey of 200 companies showed pay packets were likely to rise by 5 per cent - lower than what prices have risen already by, and below the 6 per cent inflation forecast this year.
But for now, the economy is growing, with jobs aplenty.
The ministry's report showed a record 73,200 new jobs from January to March. This includes 46,500 in services, 14,500 in construction and 11,800 in manufacturing.
But unemployment crept up to 2 per cent in March, from 1.7 per cent in December. Among residents, the rate was 2.9 per cent, up from 2.4 per cent.
As for vacancies, there were 38,200 openings in March with more jobs for professionals, managers, executives, technicians, clerical, sales and service staff.
Analysts like Dr Park believe unemployment may rise and job growth could slow - a point backed by a Monetary Authority of Singapore survey of economists, who see growth slowing to 4.7 per cent this quarter.
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