No shock therapy, but still a relief

National Wages Council calls for pay rise of at least S$50 for low-wage workers

SINGAPORE – The unrelenting inflation and the high profile debate over former National Wages Council (NWC) chairman Lim Chong Yah’s “wage shock therapy” had built up an air of expectancy over the NWC’s recommendations.

And when the annual guidelines were released yesterday, unionists and low-wage workers felt underwhelmed – even though the guidelines marked the first time since 1984 that the NWC has recommended a minimum quantum of pay rise. Nevertheless, experts noted the tightrope that the NWC had to walk on, having to balance the interests of all stakeholders.

Among other things, the NWC called for a wage increment of at least S$50 for workers earning up to S$1,000 a month – such workers make up about 10 per cent of the workforce here – in line with the labour movement’s proposal reported earlier in the media.

Yesterday, unionists were given a closed-door briefing on NWC’s recommendations, which have been accepted by the Government. Emerging from the two-hour briefing, Mr K Raman, general treasurer of the Amalgamated Union of Public Daily Rated Workers, told reporters it would be “very difficult” to explain the increment to his workers. “Definitely they’ll ask, S$50, what can I do? With the high standard of living, today (I take S$50), tomorrow, it’s gone.”

The recommended minimum quantum – which works out to a 5 per cent increment for those earning S$1,000 – only “maintained” current real income levels, given inflation rates, said Associate Professor Hui Weng Tat from the Lee Kuan Yew School of Public Policy.

The NWC could have looked at wages from a sectoral basis and recommended certain wage guidelines for specific occupations, he suggested. “But these are only guidelines, and not mandatory, so perhaps if the recommendation had been too high, you might not have many employers adopting these guidelines,” he added.

Associate Professor Randolph Tan from UniSIM’s School of Business felt that the NWC could have extended the scope beyond those earning up to S$1,000 but said the move to recommend quantitative guidelines was a step in the right direction. “No one will going to look at 5 per cent and say it’s great, but it is important to start somewhere and build on it,” he said.

Member of Parliament (Ang Mo Kio GRC) Inderjit Singh said the NWC has recommended only “the bare minimum”. “I don’t think businesses will be hit too hard by (a S$50 increment),” he said.

National Trades Union Congress (NTUC) assistant secretary-general Cham Hui Fong said the labour movement had proposed implementing a range of wage increments, and the upper end of this range would exceed S$50. But it was later agreed that a upper limit should not be imposed, as it could result in companies capping what they were willing to pay, she said.

Security supervisor Mr Magalingan, 64, whose basic salary is S$860 before allowances, told Today he would welcome a higher increment. But he noted: “If (employers) are recommended to pay more, maybe they will pay more, but then they hire less people or cut jobs.”

Mr Tan Ah Lek, 71, who works as a cleaner, added: “To have something is better than not having anything. At least (with the S$50), I can eat one more chicken wing every day.”

We have to uplift low wage workers: NWC chairman

NWC chairman Lim Pin said the council looked at wage issues from the “social” aspect. “Because we note that this particular group of lowest of the low-wage workers have been left out and we have to do something to lift them up,” he said.

Responding to journalists’ questions, Prof Lim said the political climate had not influenced the council into making its first quantitative recommendation in nearly three decades. Still, he added: “Now in a way we have come to a head, and we must do something about it … with all this talk about inclusive growth … it is social in a way, a consciousness.”

For the remaining income groups, it was not practical to specify a quantum as the range of salaries varied greatly, he added.

Singapore National Employers Federation president Stephen Lee noted the council’s recommendations in previous years “did not seem to have worked well”. “So this year … we said, okay, we push harder, and have a specific (quantum).” he said.

Mr Lee said the S$50 minimum “reaches a certain balance” between the employers’ interests and extending a helping hand to low wage workers.

Association of Small and Medium Enterprises president Chan Chong Beng said SMEs have been hit hard by high rentals, higher foreign worker levies and lower dependency ratios. “The recommended level could be higher … but I think we don’t want to pressure companies too much,” he said.

The move is expected to impact employers in the cleaning, security and front-line service industry the most.

KH Security employs some 180 staff, of which about 10 per cent earn up to S$1,000. Its business development manager Gary Haris said: “It’s a gradual move that I think we can manage.”

NWC recommendations

– Companies should grant built-in wage increases for 2012/13, taking into account the prevailing labour market conditions, as well as their respective business performance and prospects

– Companies should reward employees through variable wage components where appropriate, in line with the companies’ performance and workers’ contribution

– To help low-wage workers, companies should grant them a built-in wage increase in the form of a dollar quantum and a percentage wage increase. Companies that are doing well may also consider granting these workers an additional one-off lump sum payment.

by Lin Yanqin and Woo Sian Boon, Todayonline
 May 24, 2012
Link : No shock therapy, but still a relief

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One comment on “No shock therapy, but still a relief

  1. gandlin leo says:

    It is indeed a relief to the lowly paid, but it is clearly insufficient.$50.00 would barely pay for a cup of coffee or tea during lunch and tea- breaks. The real problem lies with the high rentals which businesses have to pay.

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