The National Wages Council calls for wage increase for low-wage workers

In many parts of the world, call to raise wages (especially the minimum wage) is performed through adversarial and antagonistic events such as protests and sit-outs. This is attributed largely to the politics of these countries. Where governments are unable to mediate and seek consensus, parties have to take it on themselves to fight for these rights. 

In Singapore, we’re better than that. Not only do we not have to resort to protests, we have a mechanism built into our system to negotiate, recommend and even influence wage increases. This is the role of the National Wages Council.

Each year, the National Wages Council convenes to give wage increase recommendations to employers. This year, the tripartite body considered the effects of a slower economy. The Ministry of Trade and Industry has forecast that Singapore’s economy will grow 1.5% to 2.5% this year, down from the 3.1% expansion achieved last year. 

Because of this, NWC urged employers to maintain the same level of wage increments for their low-wage earners this year.

In summary, their recommendations include:

  • Giving low-wage workers earning up to S$1,400 a built-in wage increase of S$50 to S$70 this year (the same range it suggested last year). However, it raised the wage threshold. Last year, the recommendation was for such increments to be given to workers earning up to S$1,300.
  • A one-off payment of S$200 to S$360 for low-wage workers employed by companies which recorded productivity growth last year. This is the second time that the NWC has recommended such a payment, though the range has dropped from last year’s recommendation of S$300 to S$600.
  • For low-wage workers earning more than S$1,400, the NWC recommends employers grant a reasonable pay bump and/or a one-off lump-sum payment “based on (their) skills and productivity”.

The fundamental position that the NWC takes is this: wage increases must be justified by productivity growth. For this reason, the organisation puts forth that retraining and upskilling is the way for companies to protect themselves and their employees from uncertain economic conditions. 

It asks for employers to:

  • Redesign jobs and train their employees to take on these roles
  • Offer structured training for their employees
  • Invest in training all employees in emerging skills to ensure those at risk of redundancy continue to be employable
  • Tap government schemes to fund their training programmes

One such important component of training is the Company Training Committees (CTC). The CTCs are an initiative of the Labour Movement. These are structured training programs driven by the NTUC to intensify training efforts.

Commenting on the guidelines, NTUC President Mary Liew said: “The NWC guidelines will support our workers in their transformation to take on current and future workplace challenges. To do so, employers must help their workforce skill up and move up. We encourage more companies to work with the Labour Movement to set up Company Training Committees (CTCs) that will identify the training and skills that workers in the company require and develop the necessary training programmes to help them keep up with industry transformation.”

These challenging times should be turned into an opportunity for companies to refocus on training. “When there is a slow-down, this is the best opportunity to retrain. In a very fast-moving economy, there is little time to do so… (as) resources are so tight,” said Dr Robert Yap, president of the Singapore National Employer’s Federation.

The work of the National Wages Council cannot be underestimated. It is our built in pressure release valve for matters regarding wages, it is the mechanism to reduce tension between employers and employees on a national level. 

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