The National Wages Council has announced that the number of workers earning below $1000 have dropped from 9.8% (in 2012) to 6.8% (in 2014).
In addition to this, they have called for an increase of at least $60 to low-waged earners (defined as earning not more than $1100).
Each year, the National Wages Council sits to decide on the health of wages in this country and to propose recommendations. These recommendations are gazetted and in the case of unionised companies, the wage increase recommendations are usually accepted.
We speak with Cham Hui Fong, the Assistant Secretary-General of the NTUC, and also a member of the National Wages Council to find out more about this body and what they do.
This is Cham Hui Fong:
1.) So Ms. Cham, what exactly is the National Wages Council (NWC)? Could you tell us in ONE sentence?
The NWC sets the tone for annual wage increases. 2.) Why should government and employers support NWC recommendations?
It is a tripartite arrangement since 1972 and has helped shape the pay structure and address economy ups and downs over the years.
The Council promotes flexible wage systems to ensure fairness in pay structures, to different groups of workers. Unions and workers have adhered to the spirit all these years. 3.) What is your role in the NWC, representing NTUC?
The NTUC leads and acquires input from union leaders and members. This ensures the views of unions and workers are being heard
(Photo from the Straits Times)
4.) How does the NWC come up with the guidelines? Are the figures arbitrary?
The Council adopted qualitative guidelines for many years till 2012; that was when we realized low wage workers are not getting fair share of the wage increases. This made it tough to negate the divide between the 20th and 50th percentile.
In 2012, we also adopted a quantitative guideline. We felt the quantum of $1000 is a reasonably low wage to begin with and it happens to be about 10% percentile of our pay. 5.) The guidelines clearly benefit wages on the bottom tier, but what’s in it for PMEs?
The quantitative approach benefits the lower tier. However, the guidelines in their entirety will apply to all… including PMEs. The qualitative portion of the guidlines recommends paying according to performance and granting wage increases to all. 6) What will happen to employers who don’t follow the guidelines? They are but recommendations after all.
Yes, there indeed will be some employers who do not follow the guidelines. However, given the tight labour market, employees can move. 7) Will our salaries just keep increasing every year? That’s not entirely possible is it?
It is possible! As long as there is value creation to the economic activities that we do and productivity improvements. 8) Complete this sentence: “If NWC was a chicken rice stall…”
…it must continue to have a $1.99 meal to cater to the lower income. It should also have a healthy meal with salad with steamed chicken for the health conscious…and fried chicken for the young and adventurous. It should ideally also have delivery order for those who are busy at work or work from home… and the menu must be constantly refreshed to cater to all walks of life.