With the labour market outlook and business conditions remaining uneven across sectors, the National Wages Council (NWC) on Wednesday (May 31) continued with a new practice of recommending a range of wage increases.
The council proposed that between S$45 and S$60 should be given to low-wage workers – lower than last year’s range of S$50 to S$65 – from July 1. At the same time, it widened the wage threshold to S$1,200, from S$1,100 previously, covering more workers.
Stressing that wage increases need to be “sustainable and fair” in the current economic climate, the NWC said employers should share productivity gains fairly with workers.
Based on figures from the Ministry of Manpower (MOM), the number of workers drawing a basic monthly wage of up to S$1,200 stood at 133,100 last year. This is 44 per cent more than the 92,400 workers who earned up to S$1,100 a month.
Amid an uneven labour market outlook and business climate across industries, the NWC said there was "merit" in continuing to set a range for recommended increments. It did so for the first time last year – departing from a single sum – to accommodate firms' performance and offer flexibility to employers.
On the lower range of increments this year, Dr Robert Yap, president of the Singapore National Employers Federation and an NWC member, said it was to make adoption more "sustainable" for firms, so that more could jump on board. "It's all about responsible, sustainable growth," he added.
The MOM’s yearly report on wage practices, released on Tuesday, showed that a larger pool of firms (21 per cent) adhered to the NWC's recommended quantum of an increase of at least S$50 last year, compared with 18 per cent in 2015, when the recommended quantum was at least S$60.
The NWC said that since the quantitative guidelines were rolled out five years ago, the proportion of full-time citizen and permanent resident employees drawing a basic wage of up to S$1,000 is estimated to have fallen gradually from 10.6 per cent in 2011 to 6.8 per cent in 2014, and 4.7 per cent last year.
The proportion of workers earning up to S$1,100 in basic wages among full-time resident employees was also projected to have dropped from 8.2 per cent in 2014 to 5.7 per cent last year.
Hence, there was "merit" in further raising the basic wage threshold to benefit a larger pool of low-wage workers, the council said.
Acknowledging that some low-wage workers are hired in outsourced work, the council called on employers and service buyers to incorporate its wage recommendations into outsourced service contracts. It also urged them to take into account workers' experience and performance when employment contracts are offered or renewed.
On the whole, the council stressed the need for increments to be "sustainable and fair", in line with the business prospects of firms, as the economy undergoes a transition. Variable bonus payments should reflect both the firms' performance and contributions of workers, it added.
For instance, it said employers that have performed well but confront uncertain prospects may "exercise moderation" in wage increases but should reward their employees with variable payments according to the firms' performance.
Those hit by the double whammy of lacklustre performance and uncertain prospects may "exercise wage restraint", and the management should lead by example and take greater steps to transform and grow their businesses.
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