SINGAPORE - Low-wage workers earning below $1,000 each month can expect a pay hike of at least $60 this year, if their employers accept national wage guidelines issued yesterday.
For the third year in a row, the National Wages Council (NWC) has recommended that these workers, whose income growth has lagged behind that of other workers, get a minimum built-in increase to their monthly pay. In 2012 and last year, it also recommended minimum pay hikes of $50 and $60 respectively.
"This will give low-wage workers... a higher percentage built-in wage increase than for other workers," said council chairman Lim Pin at a media briefing, noting it would build on momentum generated in the last two years.
For low-wage workers whose salaries have crossed the $1,000 monthly threshold, the council called for an "equitable and reasonable" wage increase without specifying any amount.
And as for other workers, the council stuck to its practice of the past 30 years of giving general guidelines, urging employers to give built-in wage increases that take into account firms' business performance, prospects and sustainability.
The wage guidelines take effect from July 1. In making these recommendations, the council noted the economy is expected to grow by between 2 and 4 per cent, and labour demand is likely to remain strong this year.
The council also singled out the impact of MediShield Life premiums that will be introduced next year, saying employers and unions should negotiate how to help workers pay for them.
It also urged firms not to let up on the productivity drive, noting that real wage increases should be in line with productivity growth over the long term, in order to be sustainable.
Official data showed that while real wages grew by 3.4 per cent last year, labour productivity fell 0.2 per cent.
Made up of representatives from the Government, unionists and employers, the NWC meets each year to negotiate and issue non-binding wage guidelines closely watched by firms.
The National Trades Union Congress (NTUC) and Singapore National Employers Federation (SNEF) yesterday welcomed the latest guidelines.
NTUC was "very happy", said its president Diana Chia.
While more firms followed the guidelines last year - about six in 10 compared to three in 10 in 2012 - NTUC noted that they still lag behind the nine in 10 unionised firms.
While supporting the wage guidelines, SNEF president Stephen Lee cautioned: "If productivity does not catch up to real wage increases, in the long run, the economy will start to lose competitiveness."
The civil service, Singapore's largest employer, has also accepted the recommendations.
Labour economist Randolph Tan supported the NWC move to spell out minimum pay hikes for low-wage workers again. But he suggested re-looking the $1,000 salary threshold to single out workers for extra help. "It is likely to become less clear-cut going forward, as the next threshold is not as easily identifiable."
This article was first published on May 31, 2014.
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