NTUC chief concerned global economy heading towards stagflation
By S Ramesh, Channel NewsAsia | Posted: 31 July 2008 1606 hrs

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SINGAPORE: Labour chief Lim Swee Say has urged workers to work together to cope with a global economy which may be heading towards a state of stagflation - one sparked off by low growth and high inflation.

The NTUC secretary general made the call in his National Day message.

Singapore's National Day is being celebrated amidst concerns about the slowing global economy and rising inflation, said Mr Lim.

And to tackle these concerns, the labour movement, the employers and the government are addressing two core priorities.

First, coping with the impact of inflation without being caught in a price-wage spiral.

"The worse thing that any country does at a time of high inflation would be for the unions and workers to push for wage inflation. Wage inflation is different from wage increment. Wage inflation means you are pushing up wages to fully offset the inflation," said the labour chief.

He added that companies in the unionised sector are currently in talks on their annual increment.

One key consideration that is being taken into account in these negotiations is the current state of inflation.

The labour movement noted that private sector companies in the unionised sector have been giving a higher percentage of built-in wage increases in the first half of this year compared to last year, with the figure in the range of 4.4 per cent against 3.8 percent in 2007.

- CNA/ir