NWC recommends monthly wage hikes of $50-$70 for workers earning up to $1,300

[SINGAPORE] A bigger swathe of low-wage workers should get higher basic pay increases this year, said the National Wages Council (NWC) on Thursday.

It recommended that those earning a basic salary of up to $1,300 a month should get built-in increments of between $50 and $70.

This will cover 24,000 more workers compared to in 2017, when the NWC recommended that those earning up to $1,200 should get pay hikes of $45 to $60.

In all, some 150,000 full-time workers will come under the new basic salary threshold.

In issuing its annual wage guidelines, the council also proposed - for the first time - that companies that achieved productivity improvements last year should give their low-wage workers a special bonus of between $300 and $600.

This could be paid out in a lump sum or over several payments, it said.

In a further fillip for workers, the NWC also called on employers to give those earning above $1,300 a raise and/or one-off lump sum based on their skills and productivity. It will be up to each union and company to decide who should benefit.

The annual NWC guidelines, while not legally binding, have benefited a majority of low-wage workers in the past.

Last year, almost two of three private companies that hire low-wage workers gave them a pay rise in accordance to the council's recommendations, based on a survey by the Ministry of Manpower (MOM) released on Wednesday. This benefited 68 per cent of all low-wage employees who had worked for at least one year.

At the same time, real wage growth for all private sector workers slowed to 3.2 per cent, after factoring in inflation which came in at 0.6 per cent. Inflation this year is forecast to hit the upper half of the 0 per cent to 1 per cent range.

The latest NWC guidelines took into account the fact that the Singapore economy grew by a healthy 3.6 per cent last year, up from 2.4 per cent in 2016, said the council.

Overall labour productivity, as measured by real value-added per worker, jumped 3.8 per cent last year, more than double the growth of 1.4 per cent in 2016, mainly due to gains in export-oriented sectors such as manufacturing, wholesale trade and transportation and storage.

And so companies that achieved productivity improvements last year should share the gains with workers, the NWC said.

Employers that have done well but face uncertain prospects may moderate built-in wage increases, but they should reward workers with variable payments that reflect the companies' performance, it added.

Those that did poorly and face uncertain prospects may exercise wage restraint, with management leading by example, and "should make greater efforts to improve business processes and productivity".

The wage guidelines were accepted on Thursday by Singapore's biggest employer, the civil service, and will take effect on July 1.

MOM permanent secretary Aubeck Kam said the range of wage increments "strikes a fair balance in recognising on the one hand the improvement in general business conditions in 2017 and on the other hand the importance in maintaining flexibility for employers".

The suggested one-off special bonus is also a good symbolic move, he added, that demonstrates the importance of fairly sharing with workers the exceptional productivity gains and economic performance seen last year.

Singapore National Employers Federation chairman Robert Yap said while it is encouraging that more companies have adopted the NWC guidelines, it is also important that they focus on long-term efforts to train workers and boost productivity so that wage growth can be sustainable .

"We urge employers to adopt a more comprehensive and sustainable approach to help low-wage workers, by embarking on initiatives... to enhance their earning capacity through better skills and better jobs," he said.

"Successful industry transformation will create better quality jobs, raise skills, pay better sustainable wages as well as grow the economic pie."

THE STRAITS TIMES