National Wages Council recommends $50-$65 pay hike for low-wage workers earning up to $1,100 a month

A cleaner clearing away dirty dishes at an Ang Mo Kio coffee shop..
A cleaner clearing away dirty dishes at an Ang Mo Kio coffee shop..PHOTO: ST FILE

SINGAPORE - Low-wage workers can expect another pay hike despite the tough economic conditions, under fresh guidelines from the National Wages Council (NWC).

The NWC on Tuesday (May 31) recommended an increase of between $50 and $65 for those earning a basic monthly salary of up to $1,100.

It is the first time they have recommended a range of pay increments, instead of a minimum sum.

The guidelines take effect for one year from July 1.

NWC chairman Peter Seah said the range was not meant to absolutely cap increments at $65, but to allow employers some flexibility amid the tough economic conditions. "It is to take into account affordability. Employers should give more if they can afford it."

The Government has accepted the NWC recommendations which are not legally binding. The Government said in a statement that the recommendations would build on efforts to help low-wage workersincluding strong funding for skills upgrading through the Workfare Training Support Scheme, and the sharing of productivity gains through the Inclusive Growth Programme.

 

But it noted that buyers of outsourced services will need to play a part for the recommendations to be effective.

"The Government will continue to lead by example, both as an employer and as a service buyer," the statement added. "It will continue to take reference from the NWC guidelines in its annual wage adjustment exercise, and strongly encourage service suppliers to the public sector to adopt NWC recommendations on wage increments for their workers."

This is the fifth round of pay hikes suggested by the NWC, ever since the National Trades Union Congress (NTUC) successfully lobbied in 2012 to lift the salaries of low-wage workers.

That year, the labour movement pushed 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.

Last year, 18 per cent of private sector employers followed the NWC's guidelines in giving increments of $60 or more to their employees earning up to $1,100, compared to 31 per cent in 2014 for employees earning up to $1,000.

The proportion of full-time resident employees earning $1,100 or less a month is estimated to have decreased from 8.2 per cent in 2014 to 6.9 per cent last year.

The Singapore economy is expected to grow between 1 and 3 per cent this year.

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 April and May to set wage guidelines for companies.

Responding to the latest round of recommendations, labour chief Chan Chun Sing wrote on Facebook: "Our challenge going forward is convincing and mobilising more employers to push for productivity-driven growth and skills development as key strategies to sustainable broad-based real wage increases for all workers."

Labour MP Zainal Sapari urged employers to do more, noting that only 42 per cent of private companies doing outsourced work gave low-wage workers the $60 increment recommended by NWC last year.

"Perhaps, MOM can look into incentivising more companies who honour the recommendations", especially those that focus on low-wage workers, he wrote in a Facebook post.

"Unless all industry stakeholders work together and uplift the outsourced industries as a whole, it may be a long arduous journey to improve the workers' wages in a sustainable manner," said Mr Zainal, who is NTUC assistant secretary-general. "Job roles and operations can be outsourced, but responsibilities cannot be outsourced."

MP Patrick Tay, who is NTUC assistant secretary-general, urged employers to also take care of middle-income earners. "I urge employers to also pay particular attention to the middle income earners who are mostly PMEs (otherwise known as the 'sandwiched class') as they too have to bear the burden of the weakened global economy."