Workers must be open to training themselves, but employers must also reward workers adequately: Lawrence Wong
This is especially so for sectors where there is limited scope for productivity improvement for lower-wage workers, said Deputy Prime Minister Lawrence Wong.
SINGAPORE: Workers must be open to training themselves and adopting new ways of doing things but employers must also reward workers adequately, said Deputy Prime Minister Lawrence Wong on Wednesday (Sep 28).
Speaking at the National Wages Council (NWC) 50th anniversary dinner, Mr Wong said this applies especially in sectors where there is limited scope for productivity improvement for lower-wage workers.
“And as consumers, as taxpayers, we must be prepared to share the cost too, by paying a little more to help those who are less advantaged earn more and be valued for their work. And then together we can build a society where no one is left to fend for themselves and where every worker can secure fulfilling and dignified lives,” he said in his speech.
Singapore must never allow wages to stagnate and income gaps to widen, said Mr Wong.
“If this were to happen, people will lose hope and grow resentful with a system that they feel does not serve them, or only benefits few. And then trust will very quickly break down and social cohesion will rupture,” he added.
INFLATION AND WAGES
Singapore faces the immediate challenge of rising inflationary pressures and potential global economic slowdown ahead, said Mr Wong, who is also Finance Minister.
Inflation in Singapore has reached its highest level since 2008, he noted.
Singapore's core inflation rose further to 5.1 per cent in August, driven mainly by stronger increases in the prices of food and services.
This is higher than the 4.8 per cent in July as the inflation figure inches towards a 14-year high.
The last time Singapore reported higher year-on-year core inflation growth was in November 2008, when it stood at 5.5 per cent.
To ensure Singapore can continue to move forward, it must ensure that wages and wage increases are in line with productivity, and manage the risk of a “destabilising wage-price spiral”, where higher wages in turn cause higher prices.
Singapore is experiencing a very tight labour market - there are more than two and a half job vacancies for every unemployed person, Mr Wong added.
One reason, Mr Wong said, is that non-resident employment has yet to return to pre-pandemic levels despite the easing of border restrictions.
“Wage increases are inevitable in such a situation, but we cannot afford for wages to increase too quickly, which will cause us to lose our global competitiveness,” said the Deputy Prime Minister.
“If this happens, it will hurt both employers and employees. And it will be the most vulnerable workers who will ultimately bear the brunt of the impact if companies cannot sustain themselves.”
In keeping wage increases sustainable, this could mean that wage increases may not keep up with the higher costs of living faced by many workers in the short term, said Mr Wong.
“So the Government will do our part to close this gap and help cushion the impact of higher prices, especially for the lower- and lower-middle-income workers,” he added.
“We are monitoring the situation closely and we will provide more help if necessary.”
The Government must also help businesses and workers transform, said Mr Wong.
“In the face of increased technological advancement and disruption, we have to redouble our efforts to encourage skills upgrading and productivity improvements across all sectors of the economy,” he added.
“This is the only way to secure sustainable wage increases and improve the well-being of Singaporeans.”
Singapore should continue to uplift lower-wage workers and reduce income inequality in society, said Mr Wong.
“Because we must always ensure that wage gaps across our society do not move too far apart. And that’s why we focus our efforts on uplifting the wages of those at the bottom 20th percentile,” he added.
IMPORTANCE OF TRIPARTISM
Singapore’s “uniquely tripartite approach” has strengthened trust among all stakeholders, said Mr Wong in his speech, as he acknowledged NWC’s contributions over the last 50 years.
This is because they are able to discuss and negotiate in good faith, and find common ground in seeking win-win solutions that benefit all parties, he added.
“And when everyone sees that this approach works and produces results, it spurs them to continue engaging one another and (build) consensus.”
In the past 10 years, mean gross monthly income from work grew by an average of about 2 per cent per year after accounting for inflation, Mr Wong noted.
This translates to a constant increase in the standard of living, and the wage increase has been “broadly matched” by productivity growth over the same period.
The Government launched the Forward Singapore exercise so that Singapore can “continue to pull together as one united people” to take the country forward, said Mr Wong.
“Through this exercise we will seek feedback and ideas on our policies, and also seek to forge consensus and rally society around our shared aspirations and ideals,” he said, adding that he welcomed participation from tripartite partners.
“More than ever, NWC will have an important role to play in bringing partners together to champion fair, inclusive and sustainable growth for all. In these challenging times, I’m sure that our instincts to collaborate, to cooperate and to find consensus will see us through.”