National Wages Council suggests raising basic wage threshold for low-wage workers, proposes S$45-S$60 built-in wage increase

THE National Wages Council (NWC) is proposing to raise the basic wage threshold of quantitative wage guidelines for low-wage workers from the current S$1,100 to S$1,200 - the second time in two years it is doing this.

This means that more low-wage workers will be in employers' consideration when they are looking to follow the NWC's guidelines to propose a built-in basic wage increase in the range of S$45 to S$60 - a shift downwards from last year's proposed range.

These guidelines were issued by the NWC on Wednesday.

Previously, 92,400 full-time resident employees were earning a basic monthly wage of up to S$1,100. An additional 40,700 will be up for consideration with the higher threshold, based on the Ministry of Manpower's data.

The NWC last raised the basic wage threshold from S$1,000 to S$1,100 in 2015.

"This will ensure that increases in real wages are in line with productivity growth over the long term. This is quite critical to the future of our economy," said Peter Seah, chairman of the NWC, at a press conference on Wednesday.

With the new threshold, the NWC is "raising the bar to cover a larger pool", added Mr Seah.

Last year, the NWC proposed an increment in the range of S$50 to S$65 for those earning a basic monthly wage of up to S$1,100. This time round, it is proposing a lower range of S$45 to S$60.

Council member Robert Yap, who is president of the Singapore National Employers Federation, said this encourages more employers who may have been put off by a higher range to also start considering raising low-wage workers' basic wages.

The guidelines, which are not binding, come as Singapore is reporting uneven growth for 2017. Growth is likely to come in above 2 per cent barring materialisation of downside risks, said the government previously.

Beyond low-wage workers, the 36-person NWC on Wednesday also recommended that employers that have done well reward their workers with built-in wage increases, and variable payments consummate with their firms' performance.

Those who face uncertain prospects may exercise moderation in built-in wage increases, but should reward workers with variable payments linked to firms' performance.

The Singapore government has accepted the NWC recommendations, which will cover the period from July 1, 2017, to June 30, 2018.