Money, money, more?

The following article had been contributed by Mendi Ang, student.

 

 

Hands up – who wants a pay rise?

Everyone? I thought so.

How do you get a pay rise?

I asked my friends the same question and I more or less get the same answer: if your boss doesn’t increase, then change jobs lor.

Well, wage increases are at the heart of the labour-business relationship. Money makes the world go round. But many employers are most reluctant, and slow, to keep wages moving.

That’s where we need to give more power to the National Wages Council. Never heard of them?

 

The National Wages Council (NWC) recommendations are one of the other annual events you probably never noticed while you were busy scanning through ST Jobs. The NWC is a tripartite body comprising representatives from the employers (SNEF), the trade unions (NTUC) and the Government (MOM). Through an annual meeting, the body discusses wage issues and set guidelines agreed upon by the three parties.

Every year, they ask for wages to increase and recommend a figure. The NWC guidelines for 2014/2015 can be found here.

In summary, the recommendations are as such –
For the low salaried tier (< S$1,000 per month): Quantum wage increase of at least $60, year on year
For all other tiers: Built-in wage increase depending on company performance, year on year

These guidelines are to be used by unions and employers of unionised companies for wage negotiations. Employers of non-unionised companies use the recommendations to determine wage increase. The NWC is even trying to raise the threshold from S$1,000 to S$1,200 for the low wage tier to include more workers.

I know what you are thinking: Guidelines are just guidelines, companies don’t have to follow; all no action, talk only.

To shed some light on this, the guidelines are backed by the government, and included in the statutes:

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“And Whereas the Government has accepted those recommendations”
“The NWC Wage Guidelines 2014 which may be adopted by an employer to adjust the wage of an employee for the period commencing on 1st July 2014 and ending on 30th June 2015 (both dates inclusive) shall be in accordance with the recommendations of the NWC as set out in the Schedule.”

If Government, statutory bodies and public organization accept and follow the recommendations, then the recommendations should not be slighted by employers.

 

Reports show 57% of establishments in Singapore gave at least $60 built-in wage increase as recommended by the National Wages Council in 2013, up from the 28% that gave at least $50 recommended in the preceding year.
But only 57%? How do overall wage increments in Singapore look like?

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Here, you can see wages going up year on year. Note that these are changes in percentage – the only dip below 0% was in 2009.

Not many people elsewhere can see such substantial wage growth.

Is this the work solely of the National Wages Council? Maybe not.

Is the work of employers, employees and government working together? Well, I’m willing to take a big bet that it is. If you were in a country where unions are more aggressive, how do you think the wage increments will look like?

Besides the NWC guidelines, the Progressive Wage Model (PWM) introduced can also make you grateful to be a Singaporean. How many countries implement this? Others practise the minimum wage model, and in a previous article, we had a quote from one Andy Tay, which goes like this: ‘Alamak… Maintain at minimum only? How can?’

Well you may be right so far, but I still want more money to save up! I think I can earn better if I were to change my job rather than rely on all these policies and stuff. While I’m neutral as to whether we should change our jobs too often, the larger adverse effects of job-hopping ought to be reflected upon. The actual impact may not be as positive as we imagine. Employers will have to spend more money to train up new workers, and foreign companies may be deterred from setting up firms here – which may eventually reduce overall productivity and economic growth.

Just as what PM Lee Hsien Loong said in his May Day Message 2015, “Wages have been rising in the tight labour market, but this is not sustainable. If productivity continues to stagnate, after a while so will wages, which may even fall back.” NTUC has also warned that wages will stagnate if firms do not become more productive. Are we making our pay rises difficult?

If we do shortchange ourselves, soon it might be money, money… no more.

 

 

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