The National Trade Union Congress (NTUC) has proposed to the National Wages Council (NWC) that workers be given a minimum dollar amount as an increment to their basic pay, instead of a one-off payment.

Sources told The Straits Times that the amount should also be enough to offset the impact of inflation for low-wage workers.

It is believed that the amount will be higher than the inflation faced by a worker earning less than $1,000 a month.

This comes amid a drive by the Government and NTUC to raise low-income workers' wages, especially those working in the cleaning and security industries.

The proposal stems from NTUC's preference for low-wage workers to get a pay rise based on a fixed dollar amount, instead of calculating it as a percentage of their pay.

Current guidelines issued by NWC state that increments have two parts: a fixed amount and a percentage increase.

It does not specify what that fixed amount should be.

The Straits Times said that there was no immediate objection to the idea from employer representatives on the council when it was first tabled at NWC meetings.

Member of Parliament for Bishan-Toa Payoh GRC Mr Zainudin Nordin said he welcomed the idea of an 'inflation plus' model as it will help low-wage workers who are worried about the cost of living.

An employer in the security industry said the bigger pay packet will attract better workers and improve the image of the industry.

However, he cautioned that employers should not suppress wages by going for the cheapest bid when buying certain services.

A UniSIM academic told The Straits Times that fixed pay rises could reduce flexibility in the labour market and be counterproductive as it will not prevent employers from laying off workers who are relatively too costly.

It also only benefits employed workers.

A more viable solution would be for employers to ensure that low-wage workers improve their skills and productivity at the same time, he said.

paullim@sph.com.sg