Gov't accepts NWC proposal for wage increase

Melissa Aw

[UPDATED 23 May 6.38p.m. to include that the government has accepted NWC's proposal]

The government has accepted the National Wages Council (NWC)'s proposal to impose a minimum pay raise for low-wage workers on Wednesday, and urged firms to take advantage of government grants for productivity improvement.

The proposal put forth by NWC on Monday had recommended that workers earning less than S$1,000 be given a pay increase of $50. The council had also recommended firms to give a built-in pay rise to all workers this year to help them cope with inflation.

According to The Sunday Times, the NWC had accepted a proposal from the National Trade Unions Congress (NTUC) to increase the pay of low-wage workers by $50 plus a percentage increase. The increment of $50 will be included as part of the workers’ basic pay -- not a one-off payment.

This is the first time since 1984 that the NWC has recommended a minimum amount for a pay hike.

The issue of wages has become a hot topic of discussion in Singapore after an economist proposed “shock therapy” to dramatically increase the pay of low-income workers to cope with inflation, which is expected to remain at above 5 per cent through the next few months.

‘Pressure to adjust the wages’

Ho Kong Weng, senior lecturer at UniSIM’s School of Business voiced approval of NWC’s move. “It is important that productivity be enhanced by various channels either through the workers themselves or through government schemes,” he said.

But he noted that at this stage “it is only a recommendation by the NWC, [hence] companies may choose to follow the recommendation, or not -- it's not compulsory”.

Kurt Wee, vice-president of awards and projects for the Association of Small and Medium Enterprises (Asme), echoed Ho in stressing that it is important to look at the correlation between the value of work and the level of productivity.

He said, “Wages need to be always linked to productivity -- if there’s no link… the living cost of low-wage workers and cost of living in Singapore will be imbalanced."

“Current wage levels make it hard for people to cope with the cost of living. The economy and society is caught in the situation where the recent influx of low-wage immigrants has depressed the possible progression of low-wage workers of Singaporeans. [Hence], since this situation has been in act for the last few years, there is a lot of pressure [for the government and NWC] to adjust the wages,” he added.

Last week, Member of Parliament (MP) for Pasir Ris-Punggol Zainal Sapari also addressed the issue of minimum wage of low-wage collar workers in Singapore.

Speaking to an audience of about 50 Young PAP members and the public, Zainal had said that the government has not been blameless for the widening income gap between the rich and poor in Singapore.

“The government can be equally responsible [for the widening income gap] because it sometimes doesn’t have the political will to make difficult decisions to help low-wage workers,” he said.