Why It Matters

Timely call to boost wages

On Wednesday, the National Wages Council (NWC) urged employers to raise the pay of workers earning up to $1,200 per month by between $45 and $60 this year.

This is the sixth year in a row it has recommended minimum pay hikes for low-wage workers. The amount was set at $50 in 2012 and raised to $60 in 2013, where it stayed for three years. Last year, the recommended hike was a range - from $50 to $65.

One cannot help but wonder: Why did the council make recommendations in the same veinfor six years? It seems it has not made enough impact.

This view is backed by data. Last year, the NWC urged employers to reward workers earning up to $1,100 per month with pay hikes of between $50 and $65. But only 21 per cent of employers did so.

Here is the rub: Employers can legally ignore NWC guidelines. Most do. While unionised firms fared better - about half of low-wage workers in such firms received the minimum stipulated fare hikes - even the unions could not get more employers on board.

Despite these setbacks, there are reasons why it is important for the council to stay its course.

First, the NWC has progressively expanded its minimum pay hike call to cover more low-wage staff. When the NWC first recommended a minimum $50 pay hike in 2012, it set the bar at those earning up to $1,000 a month. It was gradually raised to $1,100 in 2015 and $1,200 this year. This recognises that while low-wage workers are earning more, they continue to need help to boost their incomes.

Second, the NWC's call is part of a broader effort to help low-wage workers. Efforts include the Workfare scheme for those earning up to $2,000 a month and the labour movement's compulsory wage ladder for cleaners, security guards and landscape workers.

Third, employers tend to hold back pay hikes or cut salaries as the economy slows. The NWC is reminding them not to cut wages of low-wage workers further.

The NWC's call may sound repetitive, but it is nonetheless timely and still relevant.

A version of this article appeared in the print edition of The Straits Times on June 03, 2017, with the headline 'Timely call to boost wages'. Print Edition | Subscribe