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Many welcome NWC recommendations, but ASME says challenges still ahead

While the National Wages Council’s recommendations have been welcomed by many, the Association of Small and Medium Enterprises said there are still challenges ahead.

SINGAPORE: While the National Wages Council’s (NWC) recommendations have been welcomed by many, the Association of Small and Medium Enterprises (ASME) said there are still challenges ahead.

ASME said despite pushing for productivity and innovation in the last few years, productivity is still lagging behind wages.

Kurt Wee, ASME’s president, said: "There's sometimes a limit to how much more productive you can get when you keep raising wages by five or 10 per cent a year. It's impossible for productivity to go up by five or 10 per cent a year. So the alternative is that businesses may be forced to raise prices. One important thing is for the government to look at measures to reduce business costs. Rents and compliance costs have been substantial components of business cost."

One union backed the call on employers to incorporate the recommendations into outsourced service contracts.

Nasordin Hashim, Building Construction & Timber Industries Employees’ Union’s president, said: "Usually when companies outsource these jobs they don't give the flexibility to have wage increases so these recommendations encourage service buyers and service providers to incorporate NWC recommendations in the tender process."

The labour movement supported the NWC's focus on low wage workers.

Cham Hui Fong, National Trades Union Congress’ assistant secretary-general, said: "This is the overarching principle that we have for the lower wage workers -- they should enjoy a higher built-in wage increase so we can continue to narrow the gap between the bottom 20 per cent and the middle wage."

With the introduction of MediShield Life next year, the National Trades Union Congress has also urged companies to work closely with unions to look into appropriate measures such as the Portable Medical Benefits Scheme or additional Medisave contributions to help employees pay for their premiums.

But one union has raised concerns about the impact of the new insurance scheme on pensioners who have almost free medical benefits for life.

Ma Wei Cheng, Amalgamated Union of Public Employees’ general secretary, said: "And since the MediShield Life is going to be compulsory, how… this group of people (will) be affected if they are required to also pay the full premiums like all the others, we think that that's not fair."

Earlier this week, the government assured Singaporeans that the Public Service Division is studying this with unions to ensure pensioners are not adversely affected. 

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