Lower-wage civil servants get mid-year wage increase

Wage hike next month; 0.3-month bonus for all civil service staff

By Phua Mei Pin, The Straits Times, 6 Jun 2012

MORE than 9,500 lower-wage civil servants will get a pay rise next month, on top of a 0.3-month bonus being paid out across the civil service.

The built-in increase of $30 to $60 per month for Division III and IV officers was given in line with the National Wages Council's (NWC) latest recommendations and, together with annual increments, will raise the wages of this group by 3 per cent to 10 per cent.

While the Government has given mid-year pay hikes before - with the last one in 2001 - this round is targeted at its lower ranks.

'This signals the Government's strong commitment to help raise the salaries of lower- wage civil servants,' said the Public Service Division (PSD) in a statement yesterday.

This year's mid-year annual variable component, however, is lower than last year's because of slower economic growth.

On the pay rise, the PSD said the Government decided to go beyond the NWC recommendation, made two weeks ago.

The NWC urged employers to give lower-wage workers a built-in pay increase this year, to cushion them against rising inflation and costs.

It suggested a quantum of at least $50 for those earning a basic monthly salary of $1,000 or less.

With the changes, Division IV officers, who typically earn between $860 and $1,540 monthly, will get a pay hike of $60 on top of their normal an-nual increment of $30.

Division III officers, earning between $1,150 and $2,700, will get $30 more, on top of the usual increment of $50.

The move was praised by unions like the Amalgamated Union of Public Daily Rated Workers. Its president Subari Samuri said: 'The built-in wage increases... will go towards helping our lower-wage members cope with the rising cost of living.'

Others said wage rises, being 'locked in', are better than bonuses that can vary from year to year.

The deputy secretary-general of the Amalgamated Union of Public Employees, Mr Yeo Chun Fing, said higher basic pay also means bonuses based on monthly salaries, like the 13th-month payout, are bigger.

Economists said the move signals an effort to reduce the wage gap, a hot-button issue.

Said Citigroup's Mr Kit Wei Zheng: 'The Government is trying to lead by example by lifting the wages of the most poorly paid. It is a direct way of dealing with the wage gap issue, on a smaller scale.'

With civil service pay widely seen as a benchmark for the private sector, unions are hoping that companies will follow suit.

Said National Trades Union Congress assistant secretary- general Cham Hui Fong: 'We want companies to respond positively, to pay low-wage workers a decent increase to at least help defray inflation.'

But Singapore National Employers Federation executive director Koh Juan Kiat said this will also depend on factors like productivity growth and demand and supply in the labour market.

'Employers make wage adjustments based on their performance and prospects.'

On the lower mid-year bonus - last year's was 0.5 month plus $250 - the PSD said Singapore's economy expanded 'modestly' by 1.6 per cent in the first quarter, while the growth forecast for the year is 1 to 3 per cent. Last year's growth was 4.8 per cent.

Said Ms Cham: 'Considering the Singapore economy's reserved expansion in the first quarter, the payment fairly rewards civil servants.'