Raising wages in a way that pays off – with productivity

Unions in other countries are mainly concerned with pushing for wage increases, but in Singapore the labour movement advocates raising wages sustainably.

That is why productivity is such a key focus because that is the only way to justify rising salaries, labour chief Lim Swee Say said yesterday.

"You will not find anywhere in the world where a labour movement is such a key advocate for productivity," said the secretary-general of the National Trades Union Congress (NTUC).

"But in Singapore we recognise that the wage increase can be sustained only if it's supported over the medium and long term through productivity gains."

The Inclusive Growth Programme is one of the key planks NTUC uses to encourage firms to embark on measures to improve productivity, and $62 million has been committed as of September.

NTUC's Employment and Employability Institute, which administers the fund, said the money goes to over 1,500 projects to benefit 77,000 workers.

These include a more efficient dishwashing machine for Clean Solutions' centralised washing area at Tiong Bahru Hawker Centre, which can wash seven times as many dishes per hour than before.

Another firm which benefited is Kimly Food Holdings, which operates FoodClique at Singapore Institute of Management. It installed a $23,000 conveyor belt system carrying dirty dishes from the seating area to the dishwashing area. This reduced the time needed to clear 360 tables from 90 man-hours to 54, said general manager Vincent Chia.

Some 10 workers using the system will see their basic salaries rise by 15 per cent.

"The wonderful thing is we managed to improve productivity through this, so there is no need to increase charges for the stallholders," said Mr Chia.

Such wage increases on the back of productivity gains have encouraged Mr Lim, who is also Minister in the Prime Minister's Office. More workers have benefited since the Progressive Wage Model was implemented in the cleaning sector, he said. But he cautioned: "If we are not able to achieve a breakthrough in the productivity ladder, the wage ladder and job ladder will be constrained."


This article was first published on Nov 8, 2014.
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