Pay-rise proposal for low-wage workers accepted

TO PROVIDE more help to low-wage workers - whose salaries have lagged behind others and who have been hit hard by rising living costs - the Government yesterday accepted a proposal to raise their wages.

Those earning $1,000 or less a month could now see a built-in wage increase of $50 or more, in addition to any percentage wage increase they may get.

Such workers could also receive a one-off lump-sum payment, to be determined by their employers, if their companies are doing well.

These guidelines, recommended by the National Wages Council (NWC), are expected to take effect from July to at least June next year, before the next set of annual wage proposals are drawn up.

Speaking at a media conference yesterday, NWC chairman Lim Pin noted that those earning $1,000 and below each month are the "lowest of the low (wage earners)" and need the most help to cope with living expenses.

Real basic wages fell by 0.8 per cent last year, after taking into account the 5.2 per cent headline inflation rate, he said.

With rentals taken out of the calculation, inflation last year stood at 4.2 per cent, while real basic wages rose but only by 0.2 per cent.

Professor Lim said that the recommended $50 wage increase was a "basic floor level" increment which companies should find "sustainable" over the long term.

A "holistic" review of the labour-wage situation was conducted - taking into account business concerns over cost pressures and the global economic outlook - before the NWC guidelines were proposed, he said.

Companies which are doing well should give these low-wage workers an even-larger increase, he added. However, NWC did not propose a similar minimum-dollar- quantum pay rise for workers in higher income brackets.

Asked why this was so, Prof Lim said: "We can't mandate a number for everyone, given the uncertain macro-economic situation. This is why we have no choice but to come back to qualitative recommendations for the others.

"But in this particular case, when we see a real need to uplift a portion of those low-wage workers' pay, we will do so."

Weighing in on the discussion,president of the Singapore National Employers Federation (Snef) Stephen Lee said any stipulated across-the-board wage increase - in terms of a specific percentage - would not solve the problem of helping the low-wage workers' salaries catch up with those from other groups.

NWC said that overall, real wages should increase in line with productivity growth so businesses can stay competitive.

So, the council encouraged the management of companies to lead productivity drives and adopt technology and innovation into their work processes.

They should also tap on government training support schemes to help workers upgrade their skills, it added.

Mr Lee said that based on discussions with business owners, Snef found that larger companies and those with fewer low-wage workers are more open to adopting the $50 wage increase.

Ms Cham Hui Fong, the assistant secretary-general of the National Trades Union Congress, added that she believes sectors which are doing well - such as the service industry - will also support the recommendations.

But employers in the manufacturing sector, which has generally been on the decline, may be more resistant, she said.

Still, implementation of the built-in wage increases should not be too rigid, said Mr Lee, although he said Snef supports the new guidelines.

"Companies want room to manoeuvre, to do staff-performance evaluation and to reward appropriate wage increases accordingly," he said. "You cannot put too much pressure on them, or how else will they be able to reward their better performers?"

reicow@sph.com.sg

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