Wages are expected to rise overall by 4.2 per cent this year, a new survey has found.

This will include those of lower-skilled workers, who are expected to benefit from tighter foreign worker policies.

The good news comes from most firms remaining "cautiously optimistic" about business, according to findings from the Singapore Human Resources Institute and wage consulting firm Remuneration Data Specialists (RDS).

These sentiments were reflected in moderate wage increases, bonuses and recruitment plans culled from a June poll of 147 firms, including both multinationals and small and medium-sized enterprises, from sectors like construction and services.

In all, workers' total incomes are projected to rise by 4.2 per cent this year. But with inflation expected to be 2 to 3 per cent, workers will see a 1.2 to 2.2 per cent increase in real wages. Next year, real wage growth will likely dip slightly, to about 1 per cent.

More encouragingly, 57 per cent of those surveyed believe lower-skilled workers will see an increase in wages because of tighter foreign worker policies.

But, RDS managing consultant Peter Lee added, it was worrying that only 30 per cent of firms said the reduced numbers of foreign workers would lead to companies redesigning lower-skilled jobs.

This could include, for instance, the wider use of technology so workers can be more productive and command higher pay.

"There is still a perception that we need not invest in lower-skilled workers. But I think these attitudes will change as it becomes harder to hire foreign workers as substitutes," he said.

Firms say it is inevitable that they have to pay workers more in the light of the labour crunch.

"Singaporeans... will not work for too-low pay," said Association of Small and Medium Enterprises president Chan Chong Beng. "If firms cannot afford to pay workers a decent salary, they should relook their business models or leave the industry."

Lower-wage workers said more pay would help with higher living costs. Part-time restaurant assistant and mum to two teens See Kwee Fong, 47, earns about $900 a month. Her factory operator husband earns about $2,000. "It would help if my pay rose to $1,100 or $1,200. Raising two children is tough," said Madam See.