By Kenny Chee

A WAGE increase of 20 per cent is possible in the next 10 years, even in unfortunate circumstances, said Prime Minister Lee Hsien Loong in a dialogue recently.

"That is a very ambitious target for us to do because we are already at a very high level of development," he added.

His comments were made last Thursday in a pre-Budget dialogue with labour and union leaders, and will be published in tomorrow's edition of NTUC This Week, a publication by the National Trades Union Congress.

In 2010, the Government began efforts to raise real median wages by 30 per cent by 2020, to improve the living standard of the average Singaporean.

To achieve this, productivity growth has to rise from 1 per cent a year to between 2 and 3 per cent. Mr Lee noted last Thursday that, over the last 10 years, Singapore's productivity improved by 20 per cent and wages rose by 11 per cent.

But he said Singapore actually did better than that, as much of the improvements were made in the last five years, following a difficult period during the Sars crisis.

He said Singapore has to improve its productivity in the next 10 years by over 20 per cent.

If Singapore was "lucky" enough to achieve a 30 per cent productivity increase, real wages for the median worker may be pushed up by about 30 per cent as well, he said.

"But if we are not lucky, we can get the wages up 20 per cent over the next 10 years, and that is something which is possible."

The dialogue session was organised by the Ong Teng Cheong Labour Leadership Institute and held at the NTUC Auditorium. It was attended by about 450 people, including union leaders and Manpower Ministry representatives.

Mr Lee added that Singapore has to rely less on foreign workers. In the last five years, about 150,000 foreign workers came into Singapore annually, he said.

If this continues every 10 years, there would be one million more people here, he said. With a population of about five million now, the population could grow to six million 10 years later and seven million 20 years from today, he said.

"I think we can squeeze a bit closer together but there is a limit to how much you can squeeze," said Mr Lee.

This means Singapore has to manage its inflow of foreign workers and be less dependent on them, and the country has to work harder to upgrade its productivity, skills and capabilities.

"That's what we must do if we are to grow over the next 10 years and beyond," said Mr Lee. "It's the only way we can grow in Singapore and improve the lives of our people."

kennyc@sph.com.sg

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