Low-wage workers may get pay rise this year

A cleaner clearing trays at a hawker centre.
A cleaner clearing trays at a hawker centre.PHOTO: THE NEW PAPER

Govt considering National Wages Council proposal, but there is concern about higher wage costs amid downturn

Low-wage workers could be set for another round of pay hikes this year.

The National Wages Council (NWC) is expected to announce next week a recommendation to give low-wage workers a minimum pay rise. Its recommendation is currently being considered by the Government and, if accepted, will kick in on July 1.

This continues a push started by the National Trades Union Congress (NTUC) in 2012 to lift the salaries of low-wage workers.

That year, the NTUC lobbied for a $50 pay hike for workers earning a basic monthly salary of up to $1,000. The NWC backed the move, which the Government subsequently accepted. It was the first time in nearly 30 years that the council specified a minimum dollar amount to increase workers' salaries.

The council continued in the same vein for three more years, raising the minimum built-in pay increase to $60 in 2013. It proposed $60 increases for low-wage workers in 2014 and last year as well. Last year, it also raised the salary bar to $1,100.

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It will be harder to get employers' buy-in when the economy is down and workers are being retrenched.

MR DAVID LEONG, managing director of human resource firm People Worldwide Consulting, warning that minimum wage hikes cannot become "an annual routine".

When the latest round of wage talks started in March this year, unionists continued to push for a minimum "quantitative" pay hike for low-wage workers similar to the levels in previous years, a source said.

Labour chief Chan Chun Sing yesterday declined to comment on NTUC's position in the wage talks.

"I will give my comment when the recommendations are announced," said the NTUC secretary-general. "The NWC (announcement) is coming out next week."

The 18-member NWC is made up of a chairman, six NTUC unionists, six representatives from employer groups, and five public-sector officials. It meets every year between March and May to set wage guidelines for companies.

It has not been revealed how big the latest hike might be. But even if the Government accepts its recommendation, it is not binding.

Only about six in 10 private-sector employers gave low-wage workers earning up to $1,000 the minimum pay hike of $60 in 2014, Manpower Minister Lim Swee Say told Parliament in January.

He added that the proportion of Singaporeans and permanent residents earning a basic monthly salary of up to $1,000 from full-time work shrunk from 9.8 per cent in 2012 to 6.8 per cent in 2014.

A source said there is concern whether the council will back a fifth round of pay hikes for low-wage workers this year because employers are worried about wage costs at a time when the economic outlook is bleak.

Council chairman Peter Seah hinted last year that the annual wage hikes could end, saying the NWC will carry out annual reviews on whether to continue recommending a fixed quantum.

Mr David Leong, managing director of human resource firm People Worldwide Consulting, said the four rounds of minimum wage hikes recommended by the council have improved the lives of low-wage workers. "It was through the sheer force of the NTUC that it happened," he said.

But he warned that the hikes cannot become "an annual routine".

"It will be harder to get employers' buy-in when the economy is down and workers are being retrenched," he said.

A version of this article appeared in the print edition of The Straits Times on May 26, 2016, with the headline 'Low-wage workers may get pay rise'. Print Edition | Subscribe