Productivity cannot keep up with wage growth: Minister Koh Poh Koon

Real wages rose 1.9% whilst productivity grew only 1.1% in 2011-2017.

In recent years, real wage growth has reached unsustainable levels as it has outstripped productivity growth, senior minister of state Koh Poh Koon said.

In a parliamentary reply, Koh said that in 2011-2017 real wages for resident workers rose by 1.9% per annum, whilst productivity grew by only 1.1% per annum over the same period. Compared to 2001-2017, real wages for resident workers grew by 1.5% per annum on the back of productivity growth of 2.1% per annum.

Koh noted that over the long term, real wage growth should track productivity growth in order to be sustainable. “This is because if real wage growth outstrips productivity growth for an extended period, businesses will be at risk of losing their competitiveness and potentially be forced to scale back or close their operations,” he added.

However, the minister noted that there are differences between real wage growth across sectors. Domestically-oriented sectors like construction and other services Industries saw real wages rise faster than productivity between 2011 and 2017.

“This was in part due to labour market tightness, which had led to upward pressures on wages, and also weak or negative productivity growth in these sectors,” Koh said.

Meanwhile, even though the global economic environment had weighed on the productivity performance of outward-oriented sectors over this period, real wage growth in these sectors was generally still supported by positive productivity growth, the minister said.

In sectors such as manufacturing, wholesale trade, and finance & insurance, real wages rose in tandem with productivity on the back of their relatively strong productivity performance. However, in other sectors such as transportation & storage and accommodation, real wage growth exceeded productivity growth.

The people you want to reach are already in this room.

Every quarter, SBR lands on the desks of the founders, CFOs, and directors running Asia's most consequential companies. Every day, they open our newsletter and read our website. It's a room that took twenty years to build — and it's the one most of our partners are trying to get into.

The good news is that the door is open. We work with companies on thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. The shape of the right partnership depends on what you're trying to do, which is why we'd rather start with a conversation than send a rate card.

If you have something this room should know about, tell us. We'll tell you honestly whether we can help, and how.

No rate cards until we understand the brief. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia