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National Wages Council recommends boost for low-wage worker salaries

The Government accepts the National Wages Council's recommendations for 2014/2015, focusing on low-wage workers and productivity.

SINGAPORE: The Government has accepted the National Wages Council's (NWC) recommendations covering the period from Jun 1, 2014 to Jun 30, 2015. 

The Ministry of Manpower said in a statement on Friday (May 30) the Government endorses the focus of the NWC's guidelines on raising productivity growth in a tight labour market. 

"Productivity needs to improve in order for wage growth to be sustainable and not erode Singapore's economic competitiveness," the MOM said. 

"Quality growth driven by productivity and innovation is important if our economy is to restructure towards higher value-added activities, and generate higher wages for our workers."

The National Wages Council  had on Friday released its wage guidelines. Here is an outline of the recommendations:

FOR LOW-WAGE WORKERS

Employers should grant low-wage workers:

  • A built-in wage increase in the form of a dollar quantum and a percentage
  • A built-in wage increase of at least $60 for those earning a basic monthly salary of up to $1,000
  • An equitable and reasonable wage increase and/or one-off lump sum based on skills and productivity for low-wage workers earning above $1,000

ON PRODUCTIVITY

To be sustainable and not erode the competitiveness of our economy, real wage increases should be in line with productivity growth over the long term.

Employers should share productivity gains fairly with workers in a sustainable manner. Taking into account the challenging business conditions, tight labour market, economic growth forecast of 2% to 4%, and productivity, the NWC recommends that:

  • Employers consider the prevailing economic and labour market conditions in giving wage increases;
  • Employers give built-in wage increases to workers, taking into account the firms’ business performance, prospects and sustainability; and
  • Employers that do well should further reward employees with variable wage components where appropriate, in line with the firms’ performance and workers’ contributions.

Firms should move towards productivity-driven growth rather than employment-driven growth. More manpower-lean methods of driving business growth should be encouraged to improve productivity.

Employers should step up efforts and have systematic processes to train their workers so that they are equipped with the skills needed to help raise productivity.

ON OUTSOURCING

Employers and service buyers in industries where outsourcing practices are widespread and many low-wage worker are hired should make a special effort to incorporate the NWC wage recommendations. Such employers should share their productivity gains with these low-wage workers through a one-off variable lump sum payment. 

Buyers of outsourced services should also factor the annual wage adjustments for the workers into their contracts, or allow for the contract values to be adjusted accordingly.

ON THE PROGRESSIVE WAGE MODEL

Employers in other industries should also adopt the concept of “progressive wages” and provide a clear progression path for their workers to upskill and upgrade, including through structured training.

ON MEDISHIELD LIFE

Employers and unions should work together and look into appropriate measures to boost employees’ ability to pay for the premiums for MediShield Life which will be introduced in 2015.

FOR THE ECONOMICALLY INACTIVE

The Government and employers should augment the labour force by encouraging the economically inactive to return to work.

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