Real median income in Singapore grew 4.3% in 2025

Key Concepts

Real Incomes: Incomes adjusted for inflation, reflecting actual purchasing power.
20th Percentile Income: The income level below which 20% of the population falls.
Median Income: The income level that divides the population into two equal halves.
Productivity Gains: Increases in output per unit of input.
Value-Added Work: Work that contributes directly to the creation of goods or services.
Professionals, Managers, Executives, and Technicians (PMETs): A category of skilled workers.
Job Stability: The likelihood of retaining one's employment.
Resident Unemployment Rate: The percentage of the resident labor force that is unemployed and actively seeking work.
Long-Term Unemployment: Unemployment lasting for a significant period (typically 25 weeks or more).
Discouraged Workers: Individuals who are not in the labor force and have stopped looking for work because they believe no jobs are available.
Labor Force Participation Rate (LFPR): The percentage of the working-age population that is either employed or unemployed and actively seeking employment.
OECD Countries: Member countries of the Organisation for Economic Co-operation and Development, a group of developed nations.
Global Exposure: Experience working or interacting with international markets and diverse cultures.
Flexible Wage System: A wage system that allows for adjustments based on company performance and economic conditions.
Progressive Wage Model: A framework that links wage increases to skills upgrading and productivity improvements.
Job Hiking: A phenomenon where individuals are less likely to switch jobs due to economic uncertainty.
Artificial Intelligence (AI): Technology that enables machines to perform tasks that typically require human intelligence.

Real Incomes and Labor Market Trends in Singapore

Real Income Growth and Purchasing Power

Singapore's real incomes have seen an upward trend this year, surpassing average gains from the past decade. The Manpower Ministry's latest report indicates that incomes at the 20th percentile have risen by 3.81% year-on-year, while median incomes have grown by 4.3% during the same period. This growth in purchasing power is attributed to the absence of significant inflation so far this year, coupled with gains in productivity. The report highlights an increasing quality and contribution from many individuals in terms of their professionalization and value-added work.

Shift in Labor Force Composition

The rise in value-added work is reflected in the labor market, with an increase in the share of Professionals, Managers, Executives, and Technicians (PMETs) among employed residents, from 63.8% in 2024 to 64.2% this year. The finance and insurance, and infocomm sectors have seen the most significant gains in this category, where PMETs constitute approximately 9 in 10 residents. This trend is seen as encouraging, especially in the context of concerns about AI potentially displacing PMETs.

Job Stability and Worker Preparedness

The share of permanent employees has reached a new high of 90.8%, with increases observed across most industries, suggesting improved job stability. However, the report cautions that income is not permanently secured, and all workers, regardless of category, must remain adaptable and skilled to maintain their employment.

Low Unemployment and Discouraged Workers

Overall resident unemployment and long-term unemployment remain low. The PMET unemployment rate held steady at 2.8%, while the rate for non-PMETs dropped from 3.4% to 2.8%. The number of discouraged workers, defined as those outside the labor force who are not actively seeking employment due to a belief in the futility of their search, remains low at 0.3% of the resident labor force. Despite these positive figures, Mr. Lim notes that global uncertainties are expected to continue influencing hiring, and their full impact remains to be seen.

Government Focus on Skills and Inclusivity

Manpower Minister Tan See Leng emphasized in a social media post that despite global uncertainties, the agenda remains focused on supporting Singaporeans in upskilling and building their careers. Key areas of focus will include fair and inclusive workplaces and flexible work arrangements to ensure continued contribution from all individuals, irrespective of their circumstances.

Labor Force Participation Trends

Overall Decline and Aging Population

Singapore's overall labor force participation rate for individuals aged 15 and above has declined for the fourth consecutive year, now standing at 67.9%, down from 68.2% in 2024. This decline is primarily attributed to the aging population. Despite this, Singapore's overall participation rate remains among the highest in OECD countries.

Increased Female Participation

Offsetting the impact of an older labor force is the rise in female participation. The female labor force participation rate has increased from 74.01% in 2015 to 80.5% this year. The Ministry cites higher education levels and the availability of childcare as contributing factors to this increase.

Global Exposure of the Workforce

For the first time, just over 3% of Singapore's workforce has had international work experience. The most common countries for such experience are mainland China, the United States, and Malaysia.

International Exposure and Skill Development

Benefits of Overseas Stints

Caitlin Ng's experience in Sydney, where she took on new responsibilities and gained valuable networks and experience, exemplifies the benefits of international exposure. She highlights the ability to develop strategies based on real-time feedback and strong relationships across teams and cultures. Her six-month stint has positioned her as a training and learning partner within her regional team, paving the way for more staff to be sent abroad.

Globalization and Localization

The importance of globalizing and localizing operations is stressed. Companies need to understand and cater to the needs of local markets. Overseas stints are most common among mid-career workers in their 40s and 50s, though more than half had their first overseas posting between the ages of 25 and 34. Manufacturing, financial and insurance services, and information and communications are the industries with the highest number of overseas assignments.

Competitive Advantage in the Global Talent Market

As companies compete for global talent, international exposure is becoming increasingly crucial. Multinational corporations and startups in Asia are actively seeking candidates with this experience, valuing their adaptability to diverse environments, presentation and communication skills across cultures, and understanding of market nuances.

Soft Skills Development

Beyond technical expertise, international work fosters the development of soft skills such as adaptability and resilience, which are highly valued by employers.

Economic Outlook and Wage Growth

Cautious Hiring Amidst Uncertainty

Associate Professor on Ng from the Department of Economics at NUS notes that the economy is facing uncertainty, leading companies to be more cautious about hiring. The outlook for next year suggests potential for slower wage growth in 2026.

National Wages Council Guidelines

The National Wages Council has issued guidelines for this year, with specific reminders regarding the flexible wage system. Low-wage workers are expected to receive increments of 5.5% to 7.5%. The extent to which employees receive these increments will depend on factors like their adherence to a progressive wage model.

The Role of the Flexible Wage System

The flexible wage system is particularly relevant given the current uncertainties stemming from geopolitical conflicts and other factors. It allows companies to adjust wages based on economic performance. The recommendation is for companies unsure of the future to provide low-wage increments this year, with the understanding that they will reward workers with higher increments if economic conditions turn out better than expected.

Labor Force Participation: Deeper Dive

Decline Driven by Retirements

The decline in Singapore's labor force participation rate is primarily driven by older workers retiring. While participation rates in most age groups have remained steady or slightly increased, the 15-24 age group has seen a decline. This is viewed positively, as it indicates young individuals are spending more time in education and training.

Aging Labor Force Statistics

Statistics reveal that almost one in five individuals aged 15 and older are aged 55 and above, confirming the trend of an aging population and labor force. This naturally leads to a fall in the overall labor force participation rate as people retire in their 50s and 60s.

Supporting Older Workers

There is a concern about age discrimination and the need to support older workers who wish to remain in the labor force and are still productive. Studies suggest that mixed-age teams, comprising both older and younger workers, often outperform teams of only younger workers. Older workers bring experience, skills, and resilience. The argument is made against simply dismissing older workers, especially when considering that technological advancements might reduce the overall need for labor and the number of hours individuals need to work.

High Female Participation Rate

Singapore's female labor force participation rate of over 80% is higher than the OECD average of 77%. The full-time employment rate for women is also strong at around 72%, exceeding the OECD average of 60%. This is attributed to the normalization of women's participation in the workplace through education, cultural shifts, and supportive policies. However, there is a call to increase the representation of women in leadership positions across business, finance, politics, and academia, where significant underrepresentation exists.

Job Mobility and Economic Uncertainty

The Phenomenon of "Job Hiking"

A record high share of employees are staying in permanent jobs, coinciding with a decline in job switching. This trend, termed "job hiking," is also observed in the U.S. and is attributed to the uncertain economic outlook, including trade tensions, geopolitical conflicts, and the rise of AI.

Impact of AI on Employment

Firms are exploring the extent to which AI can replace human labor. Recent years have seen significant investments in AI, with a potential for reduced employment and fewer job openings, particularly in early-career roles. This is an area that requires close monitoring.