Examining Wage Growth Trends in the Asia-Pacific Region

Countries across the Asia-Pacific region have seen quite different outlooks in recent years depending on how far along they have individually progressed to becoming fully developed nations. This has left different nations in the region with very different wage growth trends even if geographically they are close together.  

China becoming a more developed country, as mentioned in the last issue of the Workforce Trends Report, has had many knock-on effects for its neighbors. Countries like India and Singapore have seen high wage growth and high inflation as they step into the roles China once occupied in global markets, while more developed nations like Australia and China contend with the same stagnation their peers are struggling with around the globe. 

Due to these varied stages of development and economic outlooks, wage pressures are expected to also be quite different by country in 2025. More developed nations like Australia and China are expected to see lower wage growth this year than developing nations like India. Workers throughout the region will likely see wages remain above the local inflation rate, as they attempt to regain their buying power lost during record levels of inflation in 2022 and 2023.  

In general, entry level and workers with more common skillsets are expected to see much smaller wage growth this year than highly experienced workers with in-demand skills as the global skills shortage continues to proliferate. 

Wage Growth Trends in Australia

Earnings for adults working full time rose 4.7% over 2024 in Australia. Wage growth has been picking up speed steadily since the pandemic, moving from 2.1% growth in 2021 to now sitting well over double that rate. 2024 also marks the first year wage growth has outpaced peer nations like the US in recent memory.  

It’s not all good news for workers though. Inflation has dropped to more normal levels as of this year, but during the pandemic era inflation spiked as high as 7.8%. As a result, real wages, or wages minus added costs from inflation, have been dropping since 2021. According to the most recent data in June, real wages rose just 0.3%. While this is an improvement from real wages dropping as much as -4.4% in 2022, Australian workers have a long way to go to recover their lost buying power.  

Most of the major sectors that AGS serves, like professional, IT and healthcare, fell behind the national average rate of wage growth, with engineering and light industrial being the only major exceptions. Manufacturing and mining wages rose by 5.6% and 5.4% respectively, but electricity, gas, water and waste services dominated earnings figures, rising 6.3% last year.  

In 2025, Australian wage growth will remain higher than usual due to pandemic cost of living increases. Although inflation is declining, workers will seek to regain their purchasing power over the next several years. Employers must stay aware of these changes to retain valuable employees who may be tempted to seek higher salaries elsewhere.

Wage Growth in China Expected to Rise

Chinese average yearly wages grew by 0.8% from 2023 to 2024, from $16,940 USD to $17,080 USD. From 2019 to 2024, average yearly wages grew by 34.8%, starting at $12,670 (90,500 CNY). Wages in China are likely to increase as the country moves from an export-based model growth to internal consumption. Wages will have to continue to rise to boost consumption domestically.  

Over the past five years, the CNY has stayed constant against the dollar, leading to more stable labor costs for foreign companies operating in China. China has engaged in currency manipulation, propping up the CNY against global currencies. If China were to stop propping up the CNY, it would fall against other currencies, and foreign companies would have lower labor costs.  

India Shows Continued Wage Growth 

India has experienced significant wage growth in recent years, as noted in previous issues of the Workforce Trends Report. Since 2021, wages have increased by 8.5% or more, with an anticipated growth rate of 9.5% in 2025. This trend is primarily influenced by inflation rates, which have exceeded 7% multiple times during this period, similar to trends observed globally.  

Real wages have largely been stagnant because of such high inflation as Indians have struggled with the high costs of food and rising prices among other major global commodities. While this may seem to contradict the rapidly alleviating poverty in the country, a new report from “Ideas for India” offers an explanation. Rather than individual roles being paid more, prosperity and growth in India is being driven by workers improving their skills and entering the labor force. As workers transition from lower-skilled, informal jobs to better-paying, formal sector jobs, overall average wages rise due to increased productivity.  

However, real wages for these new roles remain largely unchanged. Since the supply of Indians being willing to take on these new more skill intensive jobs haven’t yet been an issue for most roles, there is less pressure on raising wages than in other countries hiring similar jobs. So, all this to say: Indians are improving the quality of their jobs, but their jobs are not improving the quality of their pay. 

Recent estimates put the number of non-agriculture-related firms in the informal sector at around 65 million. These groups employ 1-2 workers on average and include everything from food stalls to mechanics and small retail shops or manufacturing sites. These small businesses still make up most of the Indian economy and the failure to raise real wages for these workers has represented a major challenge for working Indians.  

Wages in the IT industry are expected to fall short of the overall 9.5% increase, landing somewhere between a 5.5-8% increase this year among major firms. Global economic headwinds are being cited as the major driver of this more muted outlook for India’s previously white-hot IT sector.  

Global companies have been hesitant to make further investments into their workforces in the current environment and India has not been immune to that pressure. Skill level is expected to be the determining factor for increases this year with “fresher” candidates receiving nominal increases but mid- to high-level employees with key skill sets receiving increases as high as 10-15%.  

Singapore Experiences Dip in Wage Growth

Median income in Singapore mirrored many developed countries last year, rising 3.4% overall. The country is coming off a period of massive productivity and wage growth. From 2014–2019 real wages jumped 20.4% as investment poured into the country. Since then, nominal wage growth (without adjusting for inflation) was only 0.5% lower from 2019-2024 but real wage growth plummeted to just 3.6%. Inflation has taken the front seat as the chief driver of wage growth in Singapore, but that may change this year.  

An unexpected uptick in productivity has led the Monetary Authority of Singapore (MAS) to indicate they are expecting an increase in real earnings this year. As inflation continues to ease, this may mean that nominal wage growth will decline as real earnings increase, raising baseline costs for employers beyond standard inflation adjustments. 

Real wages among the lowest paid 20% of the population in Singapore rose 5.9% in the last five years versus just 3.6% for the median worker during that same period. Many developed countries are seeing this equalization effect take hold naturally as the result of older generations retiring and many more highly skilled young workers entering the market.  

Unlike these countries, Singapore is intentionally creating this equalization effect through its Progressive Wage Model (PWM) which establishes minimum wages by industry, skill level and productivity for traditionally low paid sectors. This trend is expected to continue in 2025, with the lowest paid sectors and sectors with high vacancies like healthcare experiencing the largest increases to pay.