Monday 21 May 2012

Low-wage workers to get $50 pay rise?

Those earning below $1,000 can look to raise if Govt approves NWC's 2012/2013 recommendations
By Toh Yong Chuan, The Straits Times, 20 May 2012

Workers earning below $1,000 are likely to receive a pay rise of at least $50, if the Government says yes to the National Wages Council's (NWC) recommendations.

The NWC has accepted a National Trades Union Congress (NTUC) proposal to boost the pay of low-wage workers by $50 plus a percentage increase, sources told The Sunday Times. The $50 will be part of basic pay, not a one-off payment. Unions will negotiate the rest with companies.

The union proposal is believed to have been included in the NWC's recommendations when it met last Friday. All NWC members, who include employer group representatives, unionists and public-sector officials, have signed off on the recommendations, which await the green light from the Cabinet.

An announcement is expected this week.

If the pay rise happens, it will be the first time since 1984 that the NWC has recommended a minimum quantum of pay rise. That year, it recommended that companies raise the pay of workers by $27 plus 4 to 8 per cent.

After 1985, it stopped setting specific wage guidelines and left it to unions and employers to negotiate based on broad recommendations.

A $50 pay rise may be modest but it means that those earning below $1,000 will see a real increase in pay, said a source familiar with the annual wage talks.

Although inflation rose 5.2 per cent in March, the Government said that it did not affect as many people because a large part of the increase was due to new car costs and property rentals.

There are more than 296,000 workers earning below $1,000, according to the Manpower Ministry's latest Report on Wages 2010.

Association of Small and Medium Enterprises (Asme) president Chan Chong Beng is in favour of giving low-wage workers a boost.

A $50 increase would be manageable for most SMEs, he said, but not enough to achieve productivity gains. He preferred a higher payout which would allow employers to do more in the productivity drive.

If the pay increase comes to pass, it will mean a 3 per cent hike in security company Soverus' wage bill for its 140 full-time security officers who earn a basic pay of up to $800 each month.

Its chief executive Paul Lim is worried about the adjustment period when companies face higher labour costs while remaining locked into existing contracts. He hoped unions would be flexible during wage negotiations.

Still, he supported raising the pay of security officers, as this would help raise professionalism too. 'It is for this reason that I am prepared to stomach what I need to stomach,' he added.

MP for Bishan-Toa Payoh GRC Zainudin Nordin, who is chairman of the Government Parliamentary Committee for Manpower, said he would welcome the pay rise too.

'It will help low-income earners with living expenses, but they also have to be prudent and don't overspend,' he said.

While the move would be good news, labour MP Zainal Sapari, who heads the NTUC unit for contract, casual and low-wage workers, is concerned about workers in companies without unions.

He asked: 'Who is going to ensure that these companies follow NWC guidelines?'

Asme's Mr Chan said: 'These companies will face pressures from their workers, and eventually they will have to do something to match the market rate, otherwise they will lose workers too.'

NWC Guidelines 2012/2013: Give built-in pay rises, low-wage workers to get higher increase
NTUC proposal for low-wage workers: Give pay rise to beat inflation

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