NWC calls for pay hikes for more low-wage workers

Chairman of the National Wage Council Mr Peter Seah speaking at the headquarters of MOM on May 31, 2016.
Chairman of the National Wage Council Mr Peter Seah speaking at the headquarters of MOM on May 31, 2016. PHOTO: ST FILE

It proposes monthly wage hikes of $45-$60 for workers with a basic salary of up to $1,200

Low-wage workers should be given a rise in monthly pay of between $45 and $60 this year, said the National Wages Council (NWC).

And to spread the gains wider, it recommended yesterday that these increments be given to those earning a basic salary of up to $1,200 a month, a higher threshold than the $1,100 used last year.

The higher pay ceiling will benefit an additional 40,700 local full- time employees, according to Ministry of Manpower figures. The ceiling was last raised from $1,000 to $1,100 in 2015, which covered some 92,400 of these workers based on last year's wages.

Employers that are doing well, with good business prospects, were also urged to reward their workers with built-in wage increases and variable payments in line with business performance.

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These annual wage guidelines by the NWC, announced yesterday, were accepted by the Government and will take effect on July 1.

For the second year in a row, the NWC recommended a range of pay increments for low-wage workers instead of a fixed amount as in the previous four years.

 

The range, however, was pegged lower than the $50 to $65 recommended last year. This takes into account the patchy labour market and economic outlook, said NWC chairman Peter Seah."The range is to provide flexibility for employers in the application of this particular recommendation," he added.

In a further fillip for low-wage workers, the NWC also called on employers to give those earning above $1,200 a pay rise and/or a one-off lump sum based on their skills and productivity.

For all workers, the NWC wants employers to give "fair and sustainable" wage increases. Those that did well but face uncertain prospects may moderate built-in wage increases but reward workers with variable payments.

Those that did poorly and face uncertain prospects may restrain wage rises, with management leading by example. They should strive harder to transform and grow, said the NWC. "The council's call has always been to share with workers your productivity increases, your performance improvements, and where you need to exercise restraint, you have to, because it is more important that workers keep their jobs," said Mr Seah.

The Government said yesterday that it would refer to the guidelines in its annual wage increment exercise even though all government employees earn above $1,200.

Pay hikes are getting harder to come by. Last year, three in four employees received them, slightly lower than the year before, as slowing economic growth hit firms.

Still, 21 per cent of employers rewarded low-paid staff according to the quantums given in last year's guidelines, up from 18 per cent in 2015 before the figures were given as a range, said the NWC. The guidelines are not legally binding.

Unionised companies fared better, with at least half of those with workers earning up to $1,100 giving increments of at least $50, and over half of this group giving increments of over $65, the top of the recommended range, said National Trades Union Congress assistant secretary-general Cham Hui Fong, a member of the 36-person NWC.

Singapore National Employers Federation president Robert Yap, also a council member, said that lowering the recommended increment range this year is to encourage more employers to implement the pay rises and ensure they are sustainable.

"Employers may not be afraid to give an increment, but can we keep on giving? It is very difficult to give one year and the next year take it back," he said.

SEE TOP OF THE NEWS: Wage increases must be sustainable: NWC members

A version of this article appeared in the print edition of The Straits Times on June 01, 2017, with the headline 'NWC calls for pay hikes for more low-wage workers'. Print Edition | Subscribe