Salaries of private firm workers jumped 4.2%

Labour productivity also improved.

According to a release by the Ministry of Manpower, total wages (including employer CPF contributions) in the private sector rose by 4.2% in 2012. This was lower than the growth of 6.1% in 2011, reflecting the weaker economic conditions in 2012.

The MOM noted that after adjusting for inflation using the Consumer Price Index (CPI) for all items, real total wages (including employer CPF contributions) declined by 0.4% in 2012, after rising by 0.9% in 2011.

When adjusted using CPI less imputed rentals on owner-occupied accommodation (OOA), which relates more directly to the actual cash expenditures of households, real total wages (including employer CPF contributions) rose by 0.5% in 2012, after increasing by 1.9% in 2011.

Over the long term, real wage increases have been supported by productivity growth. Labour productivity grew on average by 1.6% per annum, exceeding the growth in real total wages (including employer CPF contributions) of 1.2% per annum over the decade from 2002 to 2012. 

In the immediate post-SARS years, labour productivity grew strongly on the back of robust GDP growth. However, in the last 5 years, labour productivity shrank by 0.4% per annum as economic growth was driven primarily by employment.