Sunday 31 May 2015

NWC Guidelines 2015/2016: Raise Pay of Low-Wage Workers

Recommendation of at least $60 raise for those earning up to $1,100 a month
By Joanna Seow, The Straits Times, 30 May 2015

LOW-WAGE workers are set for another pay bump after the National Wages Council (NWC) recommended a minimum $60 increase for those earning a basic salary of up to $1,100 a month.

The move, which works out to be at least a 5.5 per cent pay rise, could benefit at least 127,000 workers, if all employers follow the recommendations.

New NWC chairman Peter Seah, who took over the reins last month, announced this at a press briefing yesterday, saying that the council recognises that these workers have been upgrading their skills and increasing their productivity.

"The council wanted to focus on low-wage workers given that they are the most vulnerable group and should continue to benefit from Singapore's growth," he said.

The economy is expected to grow by 2 to 4 per cent this year.

In making the recommendation, the NWC noted that the proportion of full-time resident workers who earn a basic monthly salary of $1,000 and below has been falling. It stood at around 6.8 per cent last year, down from 9.8 per cent in 2012.

This partly explains why only three in 10 of their employers in the private sector followed the council's wage recommendations last year, down from over five in 10 in 2013, said the NWC.

Mr Seah said the aim is to encourage wage increases which are sustainable, and urged employers and unions to focus on helping workers to deepen their skills and raise productivity.

Productivity fell 0.8 per cent last year while real basic wages rose 3.9 per cent.

"Real wages should be in line with productivity growth over the long term," said Mr Seah.

The NWC added that other workers can be given built-in wage increases taking into account business performance, prospects and sustainability.

Some of the remaining companies unable to raise low-wage workers' salaries according to the recommendation put it down to poor business last year, said Singapore National Employers Federation Robert Yap.

Besides pay raises, the council urged unions and employers to shift towards the use of portable medical benefits for workers.

The National Trades Union Congress (NTUC) and business chambers came out in support of the guidelines, which take effect from July 1 and have been accepted by the civil service.

NTUC assistant secretary-general Cham Hui Fong said the NWC's decision to raise the income cap for its recommendations from $1,000 to $1,100 allows a larger group of vulnerable workers to be helped.

Yesterday, the NWC also said that it is reviewing whether to continue giving fixed minimum figures for its recommendations for low-wage workers, which it has done since 2012.

But labour economist Walter Theseira said a quantum is useful in coordinating efforts to raise wages, especially as such workers lack bargaining power.

Without such guidelines, bosses may not have a benchmark for their wage increases, he said.

Association of Small and Medium Enterprises president Kurt Wee said that the pay raise recommended by the council should be manageable for small and medium companies.

But he said this may not last, as demand for labour may weaken if poor global growth and the tight labour market continue to curb business expansions. "If fewer jobs are available and there is less demand, wages may see moderation," he said.

Many back NWC move to recommend fixed quantum for pay hikes
By Aw Cheng Wei, The Straits Times, 30 May 2015

THE decision by the National Wages Council (NWC) to continue recommending fixed quantums for pay rises was a good one, said employers and unionists.

Many supported the move but were aware productivity must keep pace with wage increases.

In 2012, NWC specified a $50 pay rise for low-wage workers, for the first time in almost 30 years.

Yesterday, NWC continued in the same vein, recommending a pay hike of at least $60 for those earning a basic salary of up to $1,100.

But NWC chairman Peter Seah hinted that this could end, saying that the council will review whether to continue recommending a fixed quantum.

Singapore National Employers Federation president Robert Yap backed the review, saying productivity should keep up with wage rises. "(The review) is important so as to keep the wage and labour market flexible to support economic and job growth," he said.

But union leaders and other business associations hope the recommended hikes can continue.

While the pay of lower-wage workers has been steadily rising, it is "not moving fast enough", said Mr Richard Tan, general secretary of the United Workers of Electronics and Electrical Industries which has over 64,000 members. "We are trying to close the gap," he said, adding that 10 per cent of them earn below $1,100.

Mr G. Muthukumarasamy, general secretary of the Amalgamated Union of Public Daily Rated Workers, hopes for even more help for his 700 members, who include road sweepers, pest controllers and draftsmen. "No doubt, productivity is very low right now, and these are difficult times, but... $1,100 is not enough to run a family," he said, suggesting that $1,700 is more appropriate.

"It will really help (low-wage workers) if the monthly salary can keep up with the costs of living... More money should be given because everything is more expensive now."

Having a quantum "helps to achieve a level playing field", said Singapore International Chamber of Commerce chief executive Victor Mills. Referring to the quantum, he added: "If it ain't broken, don't fix it."

Additional reporting by Joanna Seow

Relevance of NWC guidelines questioned in light of Wage Model
By Siau Ming En and Valerie Koh, TODAY, 30 May 2015

As more sectors adopt the Progressive Wage Model (PWM), which maps out career pathways with recommended wages for different levels, the question of whether the quantitative guidelines recommended by the National Wages Council (NWC) remains relevant was raised yesterday.

Asked how the model would impact future wage recommendations at the press conference on the council’s annual wage guidelines, National Trades Union Congress (NTUC) assistant secretary-general Cham Hui Fong said with wider adoption of the model, such recommendations by the NWC may no longer be needed. “Because by itself, (the PWM) would already spur the changes,” she said.

With productivity improvement, an increasingly skilled workforce and a tight labour market, these factors would “drive wages by itself”, rendering quantitative recommendations less relevant, she added.

Nanyang Technological University economist Walter Theseira agreed that growing adoption of the PWM would mean the general recommendations by the NWC become less important. But he also noted that many low-wage workers do not have a lot of bargaining power, which is why institutions such as the NWC are needed to ensure they are treated fairly.

“That’s why we have to be careful about not removing quantitative guidelines as long as they are useful. Because without them, I think it may be hard to safeguard the welfare of these workers,” he added.

The NWC is a tripartite body comprising employer, union and government representatives. Set up in 1972, at a time when Singapore was rapidly industrialising, the NWC’s main purpose is to formulate guidelines that are in line with long-term economic growth.

In 2012, it broke away from its tradition of issuing only qualitative wage guidelines by recommending a minimum quantum of S$50 in the form of a raise for workers earning up to S$1,000 each month. Then, there were also calls for the NWC to overhaul its approach and focus on improving the lot of low-wage workers.

Labour Members of Parliament (MP) disagreed that the NWC guidelines as a whole could lose relevance.

NTUC assistant secretary-general Zainal Sapari pointed out that the PWM is a salary structure without emphasis on wage increments, unlike the NWC guidelines.

Mr Patrick Tay, also an assistant secretary-general at NTUC, highlighted that the guidelines apply to all employees and not merely low-wage workers. “That’s something we want to draw attention to as well. It’s not just for low-wage workers, and we hope that the Professionals, Managers and Executives (PMEs) and re-employed workers are also fairly remunerated,” he said.

As more sectors are encouraged to adopt progressive wages, unionists are hoping that the wage threshold for the quantitative wage increase recommendations could go up in years to come.

Currently, four in five members of the Union of Security Employees are paid S$1,100 or less each month. But when the PWM for the security sector kicks off next July, all full-time security officers will be earning basic monthly wages of S$1,100.

“We have registered this point with several government agencies to review,” said Mr Hareenderpal Singh, the union’s president. He hopes that the threshold could increase to between S$1,200 and S$1,300, depending on the economic outlook.

Mr Hassan Abdullah, president of the Attractions, Resorts and Entertainment Union, said: “From a union’s perspective, more workers can benefit.” About one in 10 union members draw monthly salaries below the wage threshold, he added.

However, labour MPs felt a careful review of wage data is necessary before reviewing the threshold. “Instead of looking at the wage level per se, we want to focus on what is the target group and see what is the appropriate salary level to tack on to benefit the particular group,’ said Mr Zainal.

The Singapore National Employers Federation also welcomed the recommendations, but acknowledged that smaller companies may find it challenging to meet the recommended guidelines.

Its president Robert Yap said companies that are not doing as well need to examine the reasons and tap on productivity incentives, and explore new ways to train and upskill workers to make the company more competitive.

Companies urged to give SG50 bonus
By Joanna Seow And Aw Cheng Wei, The Straits Times, 30 May 2015

WORKERS may be in for a special treat this year after unions and employers united to urge companies to show them special recognition, whether in cash or kind, in celebration of Singapore's 50 years of independence.

National Trades Union Congress (NTUC) assistant secretary- general Cham Hui Fong yesterday called on companies that are doing well to reward workers for their contributions towards Singapore's economic progress.

Speaking at a media briefing on the National Wages Council's annual wage guidelines for the year ahead, NTUC president Diana Chia said: "There is a tripartite consensus that we should try to support an SG50 bonus for companies that can afford it."

Singapore National Employers Federation president Robert Yap also threw his support behind the idea. He said his organisation "would like to encourage companies that do well to recognise the contributions of their employees in their own ways".

He also noted that DBS Bank has given all employees ranked vice-president and below a $1,000 cash bonus, while SMRT is giving all 8,400 employees $500 worth of shopping vouchers.

NTUC's social enterprises will give vouchers to their staff. For example, NTUC FairPrice said its almost 10,000 employees will receive vouchers worth $200 for non-executives and $100 for executives.

At least two other big local companies in the telecommunications and banking sectors told The Straits Times that they would be giving something to their workers.

The Government is considering appropriate ways to recognise public officers' contributions, said Manpower Ministry permanent secretary Loh Khum Yean.

Other employer groups and union leaders supported the move.

"Every company in Singapore which has benefited from (the country's) business-friendly environment for the last 50 years will be keen to celebrate with the nation," said Mr Victor Mills, chief executive of the Singapore International Chamber of Commerce.

United Workers of Electronics & Electrical Industries general secretary Richard Tan said he suggested to employers under his union that they give workers cash, additional bonuses or vouchers.

However, smaller firms may find it hard to follow the trend.

Seng Heng Engineering managing director Jackie Lau, 32, said: "The economic climate is not very stable, so (SMEs) may find it harder to put aside the money.

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