With the labour market outlook and business conditions
remaining uneven across sectors, the National Wages Council (NWC)
on Wednesday (May 31) continued with a new practice of recommending
a range of wage increases.
The council proposed that between S$45 and S$60 should
be given to low-wage workers – lower than last year’s range of S$50
to S$65 – from July 1. At the same time, it widened the wage
threshold to S$1,200, from S$1,100 previously, covering more
workers.
Stressing that wage increases need to be “sustainable
and fair” in the current economic climate, the NWC said employers
should share productivity gains fairly with workers.
Based on figures from the Ministry of Manpower (MOM),
the number of workers drawing a basic monthly wage of up to S$1,200
stood at 133,100 last year. This is 44 per cent more than the
92,400 workers who earned up to S$1,100 a month.
Amid an uneven labour market outlook and business
climate across industries, the NWC said there was "merit" in
continuing to set a range for recommended increments. It did so for
the first time last year – departing from a single sum – to
accommodate firms' performance and offer flexibility to
employers.
On the lower range of increments this year, Dr Robert
Yap, president of the Singapore National Employers Federation and
an NWC member, said it was to make adoption more "sustainable" for
firms, so that more could jump on board. "It's all about
responsible, sustainable growth," he added.
The MOM’s yearly report on wage practices, released on
Tuesday, showed that a larger pool of firms (21 per cent) adhered
to the NWC's recommended quantum of an increase of at least S$50
last year, compared with 18 per cent in 2015, when the recommended
quantum was at least S$60.
The NWC said that since the quantitative guidelines
were rolled out five years ago, the proportion of full-time citizen
and permanent resident employees drawing a basic wage of up to
S$1,000 is estimated to have fallen gradually from 10.6 per cent in
2011 to 6.8 per cent in 2014, and 4.7 per cent last year.
The proportion of workers earning up to S$1,100 in
basic wages among full-time resident employees was also projected
to have dropped from 8.2 per cent in 2014 to 5.7 per cent last
year.
Hence, there was "merit" in further raising the basic
wage threshold to benefit a larger pool of low-wage workers, the
council said.
Acknowledging that some low-wage workers are hired in
outsourced work, the council called on employers and service buyers
to incorporate its wage recommendations into outsourced service
contracts. It also urged them to take into account workers'
experience and performance when employment contracts are offered or
renewed.
On the whole, the council stressed the need for
increments to be "sustainable and fair", in line with the business
prospects of firms, as the economy undergoes a transition. Variable
bonus payments should reflect both the firms' performance and
contributions of workers, it added.
For instance, it said employers that have performed
well but confront uncertain prospects may "exercise moderation" in
wage increases but should reward their employees with variable
payments according to the firms' performance.
Those hit by the double whammy of lacklustre
performance and uncertain prospects may "exercise wage restraint",
and the management should lead by example and take greater steps to
transform and grow their businesses.
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