NWC calls for wage raise, but money is never enough

Progressive Wage Model

progressive-wage-scale

 A few days ago, the National Wages Council proposed a salary increase.

This is nothing out of the ordinary. In previous years, NWC recommended a S$60 increase in 2013 and 2014, and S$50 in 2012.

Each year the recommended wage increment of S$60 for low-income workers earning S$1,100 or less monthly by the National Wages Council always set tongues wagging. Netizens lament that such increase is too paltry to make a difference. Others ask – once again – for minimum wage to be implemented in Singapore.  Moreover, the NWC guidelines are only recommendations, so some companies might not feel compelled to take heed.

I used to be a huge supporter of minimum wage, and I still am. However, since living in a city that imposes a minimum wage of around A$16 per hour, the drawbacks are more apparent. For one thing, the lack of minimum wage has kept prices mostly low in Singapore. The cost of paying employees a required basic sum has to be taken on by one party or another, and this often translates to increased prices of goods and services. Imagine being paid $16/hour to sell mixed rice at a food court – I’m sure that many Singaporeans would be more than willing to take on this job. But then imagine having to pay $7.50 for rice and two dishes. I wouldn’t mind… but would you?
Besides higher cost of living, minimum wage could result in underpaying workers who could be paid more than a minimum. If an occupation is predestined to be paid $xxxx, why would an employer want to pay any more than that?

And what about disparity?

In Britain, for instance, soldiers fighting on the frontline are earning less than the minimum wage that workers such as cleaners or fast food outlet employees earn. The risk and skill required by each worker doesn’t always translate to getting paid a better salary then.

The Singaporean solution is two-fold: a.) Singapore’s progressive wage system sees workers getting paid according to their skill level, which allows different workers with different skill-set to be paid accordingly. The PWM also incorporates improvement of skills and productivity – the very things that create for a worker’s employment and employability

b.) The NWC sets the direction for wage increases. Of course, the recommendation is still at the employers decision. The good news is, most…if not all of the unionised companies in Singapore accept the NWC guidelines.

Moreover statistics show that the percentage of low wage workers have decreased and national wages have increased.

In the grand scheme of things, S$60 isn’t much, but for these low-wage workers, I think any increment would be welcomed. Perhaps tripartite partners should go further and find ways which working conditions for these workers can be improved, or to provide incentives for companies to follow these recommendations to increase the salary of these low wage workers.

 

 

[plinker]

 

 

 

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