Increase employers' CPF pay-out to boost low-wage workers' pay: Prof Lim Chong Yah

Veteran economist Lim Chong Yah has called on the National Wages Council (NWC) to consider requiring companies to increase their Central Provident Fund (CPF) pay-outs to low-wage workers. -- ST FILE PHOTO: DESMOND LUI
Veteran economist Lim Chong Yah has called on the National Wages Council (NWC) to consider requiring companies to increase their Central Provident Fund (CPF) pay-outs to low-wage workers. -- ST FILE PHOTO: DESMOND LUI

Veteran economist Lim Chong Yah has called on the National Wages Council (NWC) to consider requiring companies to increase their Central Provident Fund (CPF) pay-outs to low-wage workers.

This, rather than a national minimum wage, could be used to raise pay across-the-board for the low-income, said the emeritus professor who two years ago had proposed "shock therapy" to raise wages at the bottom and freeze those at the very top.

"The NWC may wish to look into this compulsory element for raising wages of the low and very low-income earners in our present day circumstances, in lieu of a compulsory national minimum wage scheme," Prof Lim told reporters at the launch of his latest book.

He added that in the past, when the NWC wanted a comprehensive nation-wide implementation of its recommendations to increase or cut wages, it incorporated such a compulsory element. This was usually in the form of a compulsory CPF increase or cut.

Prof Lim also urged the NWC leadership to raise the mandatory retirement age from 62 to "65 and above" in order to increase the local labour supply during a time of labour shortage, such as what Singapore is experiencing now.

He was speaking at the launch of his book "Singapore's National Wages Council - An Insider's View".

The NWC's founding chairman from 1972 to 2001, he is now emeritus professor at both the National University of Singapore and Nanyang Technological University.

His suggestions for the NWC come a week after Deputy Prime Minister Tharman Shanmugaratnam announced a move that will boost the wages of 55,000 local cleaners to at least $1,000 each month, up from $850 now.

The Government will introduce an amendment in Parliament when it next sits, to introduce a tiered wage system for the cleaning sector. It will also look to introduce this model to the security sector eventually.

But DPM Tharman called it a "targeted approach, not a national minimum wage".

Prof Lim called this an innovative move, and there should be time given to gauge its impact.

In 2012, Prof Lim suggested a controversial three-year plan to lift the pay of all workers earning below $1,500 by between 15 and 20 per cent, and to temporarily freeze the pay of those earning more than $1 million. If that did not work, he said the Government should adopt a national minimum wage. He said on Thursday that he still stands by the proposal.