National Wages Council: What are they doing for our wages?

The article has been submitted to us by Elizabeth Wong, an undergraduate.


Yes, it would definitely be nice if everyone can be employed, can earn more income, and live happily ever in sunny Singapore right? But no, sadly, in the capitalist economy, this utopia is unsustainable.

In light of that, National Wage Council has put in place recommendations, centered around productivity led wage raise, that have a good intention of serving the low-income earners, but has certain limitations. How can that Singaporeans step in to help?


But first, why productivity led wage increase?

When wages increase without an increase in productivity (for example, aminimum wage policy), the employers will be the first hit.

Companies would face a much higher per unit labour cost, and maybe even forced to retrench employees to stay viable. This could lead to an increase in unemployment. Another alternative for producers to stay viable may be through increasing the prices of their products. This will then lead to higher consumer prices, higher costs of living, possibly negating the initial increase in wages for the employees, therefore a lower standard of living.

With an increase in the cost of labour, there will be a loss of competitiveness of our workforce. Less foreign and local investment may result, leading to less creation of jobs.


Not all firms (especially non-unionised ones) have taken up the recommendation by National Wage Council. This phenomenon is beyond the government’s control. One can only hope that the employees may start leaving for those jobs with a higher pay, hence encouraging these firms to increase wages so as not to lose their workers.

Not sectors can have substantial increases in productivity; some reach a ceiling. These sectors are usually low skilled, but are essential for the survival of Singapore. For example, cleaners can undergo training and use latest technology to allow them to do more work per unit cost. But how much training and technological advances can there be? Does this mean then that the real income becomes stagnant when the productivity reaches a maximum?


What can us, the Singaporeans do then? 

We can stop criticizing, and start doing. It would be much more productive to offer suggestions if we have any alternatives to the recommendations by the National Wage Council, to have open debate about them and finally settling on a solution that people are happy with.

We can also use other methods to provide aid to the low-income earners, though reaching out to them within the community. Many have complained about the poor cleaners and security guards, but how many have actually heard their story from their point of view? Showing appreciation to them, treating them with respect and engaging in conversations with them may not be worth any money, but will definitely go a long way in making their day better.

Instead of throwing stones, we Singaporeans can also reach out to the real needy. Some cleaners may be earning less than a thousand but may not necessarily depend on that for a living. Their vocation may simply serve the purpose of passing time. Hence, the people that would need the most help may instead be someone earning more, say $1800, but is using that income to raise the whole family. These people are often left out of consideration, and yet need the most help. The only way to reach out to them would be through the community. We have to start opening up our eyes and ears to the less fortunate living amidst our community. As a community, we can provide aid for those that really need help.

The NTUC is meanwhile, in the midst of setting up a tripartite task force to look into wage guidelines. The taskforce, which will comprise employers as well as representatives from the trade unions and the government, will help shape the National Wages Council’s (NWC) recommendations for the next three to five years.

Delivering help can no longer be a top down approach. Every low income earner, every child, every family has a different story and would require different types of aid suited to that profile. Help has to stem from the community, perhaps a neighbour, or a friend. For example, a neighbour works as a cleaner, but is not earning sufficient amounts to provide for the family. We can either complain about how the wages are too low for cleaners, or take action in making her life a little better. One suggestion would be for her to do part time cleaning at friends’ houses. This transaction is based on trust and is a solution that will benefit all parties.

Perhaps I am a young, naïve and idealistic Singaporean. But a community with people that care for one another, that are willing to risk and reach out a helping hand, is one that I would like to envision my Singapore to be. Policies have their limitations, but it is up to us Singaporeans to fill in the gaps.






Share your thoughts!

Zeen is a next generation WordPress theme. It’s powerful, beautifully designed and comes with everything you need to engage your visitors and increase conversions.