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Singapore: The National Wages Council (NWC) has asked for a one-off payment to low-wage workers to help them cope with the impact of higher inflation.
This is a special recommendation which the council said should take into account the company's ability to pay, as well as the fact that the government has also provided assistance measures.
The government has accepted the council's recommendations.
The tripartite council – made up of representatives from the government, employers and unions – releases guidelines for wage increases annually, after consultations with the industry and taking into account the state of the economy.
They noted that although the Singapore economy has expanded by 7.2 percent in the first quarter of this year, economists expect inflation to be at the upper half of the 4.5 to 5.5 percent range.
Stephen Lee, president of the Singapore National Employers' Federation, said: "The future is not clear (even though) the past performance has been very good. So we have come up with a recommendation to address the situation that we are currently facing to recommend a new component, which is the one-off payment."
NWC chairman, Professor Lim Pin, said the lump sum payment is to supplement the help that the government has already given to low-wage workers.
Given the economic uncertainty, the council recommended that companies give built-in wage increases which are in line with the company's performance and its business prospects.
This means making increases part of the variable component of wages.
Alexander Melchers, secretary of the Singapore-German Chamber of Industry and Commerce, said: "It's a very innovative recommendation, (so) sit down, think about what you can do, look at the impact of inflation on your lower wage workers, look at the number of lower wage workers you have, and determine an amount you can afford."
At the same time, the council warned that pushing up wages to keep pace with inflation could undermine Singapore's competitiveness in the long run.
"The worse thing to happen is to push up wages to keep pace with inflation. That will make the companies uncompetitive. Jobs and companies will be at risk and the council believes this is not the right way to go. We must focus on direct approach without jeopardising competitiveness," said Prof Lim.
A key word that the NWC is emphasising when it comes to granting built-in wage increases is for companies to ensure that these increases are sustainable.
The NWC is also encouraging companies which have done exceptionally well to reward their workers.
- CNA/ir/so
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