By Toh Yong Chuan, The Straits Times, 2 May 2012
WAGE guidelines set by the National Wages Council (NWC) to help low-wage earners may not be enough, an employers' group said, and suggested that firms do more for this group of workers.
The council now advocates annual pay rises that are calculated using a formula containing both a fixed quantum and a percentage increase.
This favours low-wage workers, but 'even that may not be enough', said Singapore National Employers Federation (SNEF) president Stephen Lee yesterday.
Mr Lee, who represents employers in the 18-member NWC, was speaking to reporters at the sidelines of the May Day rally.
His comments came after Prime Minister Lee Hsien Loong said in his May Day rally speech that he was 'sure' the NWC would pay close attention to improving the lot of low-wage workers.
While the SNEF president did not spell out exactly what the NWC is looking at, he suggested two ways in which companies can further help their low-wage workers.
While the SNEF president did not spell out exactly what the NWC is looking at, he suggested two ways in which companies can further help their low-wage workers.
One is to find 'creative ways' to give more to those who earn less, without 'busting the cost structure', he said.
For instance, companies can allocate higher increases to those who earn less and smaller increases to those with higher pay.
Another way is to help the companies: While some do not have problems giving low-income workers pay increases, others with many such workers may not be able to do so.
These companies can be given help to boost productivity, said Mr Lee. 'Otherwise, if you force them to have double-digit wage increase all in one year, they may close down,' he added.
He also stressed that companies must take the lead in the current productivity drive, not workers.
The NWC, which meets annually to issue wage guidelines that set the direction for wage policies, started meeting last month. PM Lee said that he hopes to see the council's guidelines published this month.
Unionists in the NWC were characteristically tight-lipped about the council's deliberations.
Mr Lim Kuang Beng, general secretary of the Singapore Industrial and Services Employees' Union, prefers a higher fixed increase for low-wage workers.
He said: 'If you give based on percentage, these workers will get very little... They may end up with $30 or so, and this would not be enough for a low-wage worker.'
The NWC has not announced when it will issue its recommendations this year. Last year, it issued its guidelines on April 29.
The NWC has not announced when it will issue its recommendations this year. Last year, it issued its guidelines on April 29.
NTUC PROPOSAL FOR LOW-WAGE WORKERS
'Give pay rise to beat inflation'
It suggests fixed dollar amount be given as increment to basic pay
By Toh Yong Chuan, The Straits Times, 3 May 2012
'Give pay rise to beat inflation'
It suggests fixed dollar amount be given as increment to basic pay
By Toh Yong Chuan, The Straits Times, 3 May 2012
THE National Trades Union Congress (NTUC) has proposed to the National Wages Council (NWC) that workers be given a minimum dollar amount as an increment to their basic pay - instead of getting it as a one-off payment.
The fixed dollar amount should be enough to offset the impact of inflation for low-wage workers, sources said.
This move to boost the pay of low-wage workers comes amid the drive by the Government and NTUC to raise the pay of these workers, especially those in the cleaning and security sectors.
Currently, the NWC issues broad guidelines that increments have two parts: a fixed amount plus a percentage increase. It does not specify what that fixed amount should be.
Unionists interviewed declined to disclose the fixed amount but one described it as 'meaningful' for low-wage workers. The amount is believed to be higher than inflation for a worker earning less than $1,000 monthly.
If accepted, the proposal will see the real wages of these workers go up.
Inflation rose 5.2 per cent in March but the prices of necessities and essential services rose at a more moderate pace of 3 per cent or lower, according to Deputy Prime Minister Tharman Shanmugaratnam, who made the point at a May Day dinner on Sunday.
The NTUC proposal stems from its preference for low-wage workers to get a pay rise based on a fixed dollar amount instead of having it calculated as a percentage of their pay.
It was tabled at NWC meetings last month. A source familiar with the annual wage talks said there was no immediate objection to the idea from the employer representatives on the council.
The 18-member NWC is made up of a chairman, six NTUC unionists, six representatives from employer groups, and five public-sector officials.
Some MPs and bosses interviewed liked the proposal.
Mr Zainudin Nordin, MP for Bishan-Toa Payoh GRC, said he 'definitely welcomed' the idea of an 'inflation plus' model. 'It will help low-wage workers, because their main worry now is the cost of living,' said the chairman of the Government Parliamentary Committee for Manpower.
Mr T. Mogan, security director of security and investigation firm Dragnet, is not fazed by the higher wage bill.
He argued that the bigger pay packet will attract better workers and this will, in turn, improve the image of the industry.
However, he urged the NWC to educate employers not to suppress wages by going for the cheapest bid when buying security and cleaning services.
UniSIM's Associate Professor Randolph Tan, however, feared that fixed pay rises could reduce flexibility in the labour market and may be counterproductive.
He said: 'The higher wage increases benefit only those who are employed, as it may not prevent employers from laying off those who are relatively too costly.'
Prof Tan preferred that employers 'systematically ensure that their low-wage workers move up the skills and productivity ladder'.
The NWC is expected to discuss the NTUC proposal when it meets again in two weeks' time. And its recommendations could be released as early as the end of this month.
Raise pay or risk losing low-wage staff: NTUC
Comments follow call for fixed dollar amount as increment
By Toh Yong Chuan, The Straits Times, 4 May 2012
EMPLOYERS need to accept that the days of cheap foreign labour are over, the National Trades Union Congress (NTUC) said yesterday.
And companies that do not treat their local low-wage workers better or raise their pay will risk losing them, warned NTUC president Diana Chia, who is the top union negotiator on the National Wages Council (NWC), which meets yearly to issue wage guidelines for companies.
Comments follow call for fixed dollar amount as increment
By Toh Yong Chuan, The Straits Times, 4 May 2012
EMPLOYERS need to accept that the days of cheap foreign labour are over, the National Trades Union Congress (NTUC) said yesterday.
And companies that do not treat their local low-wage workers better or raise their pay will risk losing them, warned NTUC president Diana Chia, who is the top union negotiator on the National Wages Council (NWC), which meets yearly to issue wage guidelines for companies.
'Employees are also not stupid; they also know how to move around,' said Ms Chia. 'And employers who give a lot more attention to them will probably have more employees, compared to others who don't.'
She made the point to questions from reporters on whether employer representatives on the NWC are receptive during the current talks to ideas that would help raise the pay of low-wage workers.
The NWC is made up of unionists, employer groups and public-sector officials.
Ms Chia's comments, at the sidelines of a Singapore-German Chamber of Industry and Commerce event, came a day after The Straits Times reported that the NTUC has proposed to NWC that employers give a minimum dollar amount as a pay rise for low-wage workers this year.
If it gets the nod, the NWC guidelines this year - unlike those of the past two decades - will specify an actual amount to be given to workers as a pay increase.
For many years after it was set up in 1972, the NWC issued guidelines that specified the amount of wage increases.
But in 1988, it switched to giving broad guidelines and left it to unions and companies to negotiate the details.
Earlier this week, Singapore National Employers Federation president Stephen Lee also hinted that the current NWC formula - in which the pay rise is calculated based on both a fixed quantum and a percentage increase - 'may not be enough' for low-wage workers.
Mr Lee suggested that companies can find 'creative ways' to give more to those who earn less, and that help be given to companies with large numbers of low-wage workers to boost productivity.
The well-being of Singapore's low-wage workers was one of several topics Ms Chia covered at a dialogue with about 80 German businessmen and their guests.
Dr Tim Philippi, executive director of the Singapore-German Chamber of Industry and Commerce, however, said German companies here face a labour problem that has nothing to do with cheap foreign labour.
In fact, German companies do not hire low-wage workers, he added.
Their problem? They are short of skilled workers such as engineers in specialised jobs, said Dr Philippi.
Their problem? They are short of skilled workers such as engineers in specialised jobs, said Dr Philippi.
Measured help for low-wage workers
Editorial, The Straits Times, 10 May 2012
THE approach of the National Trades Union Congress (NTUC) to the plight of low-skilled Singapore workers is a helpful one. Hit by both low wages and rising inflation, this group deserves special attention. NTUC has proposed to the National Wages Council (NWC) that workers be given a minimum dollar amount as an increment to their basic pay, instead of receiving it as a one-off payment.
Editorial, The Straits Times, 10 May 2012
THE approach of the National Trades Union Congress (NTUC) to the plight of low-skilled Singapore workers is a helpful one. Hit by both low wages and rising inflation, this group deserves special attention. NTUC has proposed to the National Wages Council (NWC) that workers be given a minimum dollar amount as an increment to their basic pay, instead of receiving it as a one-off payment.
Under current NWC guidelines, increments are a combination of a fixed amount - which is not specified - and a percentage increase. This formula offers flexibility but low-wage workers are disadvantaged because a percentage increase is unlikely to amount to very much. By contrast, a fixed amount to help offset inflation would be more efficacious for workers earning, say, less than $1,000 a month. Many of them would be from the cleaning and security sectors, which account for a large number of low-wage earners.
However, the crucial link between good intentions and viable outcomes lies in productivity. The mood of the current debate on this issue came into focus after veteran economist Lim Chong Yah suggested that the pay of low-income workers be raised by 50 per cent over the next three years, during which the pay of high-income earners would be frozen. His argument - that this move would narrow the income gap and force firms to raise productivity - was assailed by those who argued essentially that it would mean putting the wage cart before the productivity horse.
Productivity must lie at the heart of all wage restructuring schemes because low-skilled workers elsewhere are hungry enough to do more for less. Businesses are consequently forced to squeeze costs to win contracts in the global marketplace. Where the use of technology proves to be cheaper than labour, this option will be taken. If labour costs here become uncompetitive, firms might lay off workers and move to cheaper locations. This is a convincing argument for linking wage increases here to productivity gains.
The NTUC proposal can be more easily implemented if employers adopt a proactive approach. One way to maintain their overall cost structure is by differentiating wage increments so that those at the low end benefit more. Smaller firms might require a helping hand to train workers and boost their productivity. There are schemes to help them do so. For example, the Government will increase the funding for the Inclusive Growth Programme by another $70 million over the next three years to help 70,000 additional low-wage workers, bringing the total amount to $100 million. This is the way to go.
The NTUC proposal can be more easily implemented if employers adopt a proactive approach. One way to maintain their overall cost structure is by differentiating wage increments so that those at the low end benefit more. Smaller firms might require a helping hand to train workers and boost their productivity. There are schemes to help them do so. For example, the Government will increase the funding for the Inclusive Growth Programme by another $70 million over the next three years to help 70,000 additional low-wage workers, bringing the total amount to $100 million. This is the way to go.
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