Asian wages seen up next year amid crisis

Asian wages seen up next year amid crisis

SINGAPORE (Reuters): Net wages are likely to rise in most countries of Asia next year -- Malaysia, Thailand and Indonesia being the exceptions -- despite the region's economic crisis, U.S. funds survey firm William Mercer said on Wednesday.

Net wages in Thailand, Malaysia and Indonesia would fall because inflation rates were likely to be much higher than the wage increases, the survey said.

It said net salaries in Malaysia and Thailand were likely to drop five percent and those in Indonesia, the country worst hit by the Asian crisis, were expected to fall 5.5 percent.

The survey said the biggest net salary increases would be in China, where wages were likely to rise 5.6 percent, while those in the Philippines were expected to inch up by 0.5 percent.

It said net salaries were likely to rise one percent in South Korea, 2.7 percent in Japan, 3.0 percent in Hong Kong, 4.4 percent in Taiwan and 5.5 percent in India.

Net salaries in Singapore were likely to rise two percent. But the survey said that figure did not include a 50-percent cut in employer contributions to Singapore's compulsory pension scheme, the Central Provident Fund (CPF), as part of recent government moves to cut business costs.

Singaporeans can use some of their CPF money for investments like mortgages and buying approved stocks.

"CPF goes to the CPF account. It is not like cash in your pocket where you can easily dish out from the wallet and just spend," Hong Kong-based Elaine Ng, director of performance and reward at William Mercer, told Reuters.

If the CPF cut were included, Singapore's net salaries would fall eight percent and make the country's labor costs competitive with Hong Kong, Taiwan and Japan, she said.

The report said net salaries in Asia this year -- except for China, Hong Kong, Malaysia and the Philippines -- fell below the levels before Asia was hit by the economic crisis in the middle of last year.

For Singapore, the average annual salaries of managers fell about US$3,000 to US$82,000, professionals' pay dropped about US$2,000 to US$38,000 and workers were paid US$11,000, down by US$1,000 compared to 1996.

William Mercer said it collected data from about 1,200 companies in China, India, Taiwan, Hong Kong, Japan, Singapore, South Korea, Philippines, Thailand and Indonesia for the survey.