Friday, 2 June 2017

National Wages Council Guidelines 2017-2018

NWC calls for pay hikes for more low-wage workers
It proposes monthly wage hikes of $45-$60 for workers with a basic salary of up to $1,200
By Joanna Seow, The Straits Times, 1 Jun 2017

Low-wage workers should be given a rise in monthly pay of between $45 and $60 this year, said the National Wages Council (NWC).

And to spread the gains wider, it recommended yesterday that these increments be given to those earning a basic salary of up to $1,200 a month, a higher threshold than the $1,100 used last year.

The higher pay ceiling will benefit an additional 40,700 local full-time employees, according to Ministry of Manpower figures. The ceiling was last raised from $1,000 to $1,100 in 2015, which covered some 92,400 of these workers based on last year's wages.

Employers that are doing well, with good business prospects, were also urged to reward their workers with built-in wage increases and variable payments in line with business performance.

These annual wage guidelines by the NWC, announced yesterday, were accepted by the Government and will take effect on July 1.

For the second year in a row, the NWC recommended a range of pay increments for low-wage workers instead of a fixed amount as in the previous four years.

The range, however, was pegged lower than the $50 to $65 recommended last year. This takes into account the patchy labour market and economic outlook, said NWC chairman Peter Seah. "The range is to provide flexibility for employers in the application of this particular recommendation," he added.

In a further fillip for low-wage workers, the NWC also called on employers to give those earning above $1,200 a pay rise and/or a one-off lump sum based on their skills and productivity.

For all workers, the NWC wants employers to give "fair and sustainable" wage increases. Those that did well but face uncertain prospects may moderate built-in wage increases but reward workers with variable payments.

Those that did poorly and face uncertain prospects may restrain wage rises, with management leading by example. They should strive harder to transform and grow, said the NWC. "The council's call has always been to share with workers your productivity increases, your performance improvements, and where you need to exercise restraint, you have to, because it is more important that workers keep their jobs," said Mr Seah.

The Government said yesterday that it would refer to the guidelines in its annual wage increment exercise even though all government employees earn above $1,200.

Pay hikes are getting harder to come by. Last year, three in four employees received them, slightly lower than the year before, as slowing economic growth hit firms.

Still, 21 per cent of employers rewarded low-paid staff according to the quantums given in last year's guidelines, up from 18 per cent in 2015 before the figures were given as a range, said the NWC. The guidelines are not legally binding.

Unionised companies fared better, with at least half of those with workers earning up to $1,100 giving increments of at least $50, and over half of this group giving increments of over $65, the top of the recommended range, said National Trades Union Congress assistant secretary-general Cham Hui Fong, a member of the 36-person NWC.

Singapore National Employers Federation president Robert Yap, also a council member, said that lowering the recommended increment range this year is to encourage more employers to implement the pay rises and ensure they are sustainable.

"Employers may not be afraid to give an increment, but can we keep on giving? It is very difficult to give one year and the next year take it back," he said.

Wage increases must be sustainable: NWC members
By Joanna Seow, The Straits Times, 1 Jun 2017

Wage rises must be sustainable so that companies can remain competitive, members of the National Wages Council (NWC) said yesterday, in releasing the council's wage guidelines for the year ahead.

Businesses need to redesign jobs and innovate to stay competitive, and workers should also make full use of available support to refresh their skills, said council chairman Peter Seah.

"We must continue to press on with efforts to achieve higher productivity growth. This will ensure that real wage increases are in line with productivity growth over the long term," he said.

The council called for rises in monthly pay of $45 to $60 for workers earning a basic salary of up to $1,200 a month.

National Trades Union Congress (NTUC) secretary-general Chan Chun Sing said in a Facebook post yesterday that "the labour movement can play an important role in helping our businesses to transform and workers to deepen their skills, so as to achieve higher productivity and sustainable wage growth".

Unionists had tried to push for a higher quantum increase, but this had to be balanced with the need to get more employers on board.

Labour MP Melvin Yong, who is NTUC's director for tripartism and an NWC member this year, said the council took into account business conditions, labour market performance and productivity growth.

NWC called for implementing the Industry Transformation Maps, which set out strategies for businesses to seize growth opportunities. The plans include skills and wage ladders for various job scopes, said Mr Yong.

Unionists cheered the raising of the salary ceiling for the quantitative guidelines to $1,200, a move which will benefit 40,700 more local full-time employees.

"Past increments saw some low-wage workers already getting paid $1,200, and if the guidelines were based on last year's $1,100 threshold, those workers may get a smaller increment," said Mr Nasordin Mohd Hashim, president of the Building Construction and Timber Industries Employees' Union.

He also welcomed the NWC's recommendation that companies using outsourced services incorporate annual wage adjustments and the annual wage supplement for workers into new contracts.

Business groups such as the Singapore Chinese Chamber of Commerce and Industry were supportive of the latest guidelines.

Association of Small and Medium Enterprises president Kurt Wee said that the flexibility of a range of suggested increments was useful, given that the current economic climate is soft and companies digitalising their business processes are still retraining their staff. "The new guidelines, being slightly more tempered, would allow employers to phase in wage increases from increases in performance or output from the workforce," he said.

Timely call to boost wages
By Toh Yong Chuan, Manpower Correspondent, The Straits Times, 3 Jun 2017

On Wednesday, the National Wages Council (NWC) urged employers to raise the pay of workers earning up to $1,200 per month by between $45 and $60 this year.

This is the sixth year in a row it has recommended minimum pay hikes for low-wage workers. The amount was set at $50 in 2012 and raised to $60 in 2013, where it stayed for three years. Last year, the recommended hike was a range - from $50 to $65.

One cannot help but wonder: Why did the council make recommendations in the same veinfor six years? It seems it has not made enough impact.

This view is backed by data. Last year, the NWC urged employers to reward workers earning up to $1,100 per month with pay hikes of between $50 and $65. But only 21 per cent of employers did so.

Here is the rub: Employers can legally ignore NWC guidelines. Most do. While unionised firms fared better - about half of low-wage workers in such firms received the minimum stipulated fare hikes - even the unions could not get more employers on board.

Despite these setbacks, there are reasons why it is important for the council to stay its course.

First, the NWC has progressively expanded its minimum pay hike call to cover more low-wage staff. When the NWC first recommended a minimum $50 pay hike in 2012, it set the bar at those earning up to $1,000 a month. It was gradually raised to $1,100 in 2015 and $1,200 this year. This recognises that while low-wage workers are earning more, they continue to need help to boost their incomes.

Second, the NWC's call is part of a broader effort to help low-wage workers. Efforts include the Workfare scheme for those earning up to $2,000 a month and the labour movement's compulsory wage ladder for cleaners, security guards and landscape workers.

Third, employers tend to hold back pay hikes or cut salaries as the economy slows. The NWC is reminding them not to cut wages of low-wage workers further.

The NWC's call may sound repetitive, but it is nonetheless timely and still relevant.

Salary hikes stall as firms see their earnings sputter in 2016
Wage growth slowed last year, more workers had pay cuts and more firms suffered losses
By Charissa Yong, The Straits Times, 31 May 2017

Fewer workers received salary hikes last year and more took a pay cut as slowing economic growth hit companies.

Real total wages also grew at a slower rate, rising 3.6 per cent last year compared with 5.4 per cent in 2015, after accounting for negative inflation of 0.5 per cent. As they struggled to turn a profit, companies scaled back payouts made to their workers.

This year, economists expect another hard slog with uneven performance and wage growth across different sectors.

A Ministry of Manpower survey showed that with nine in 10 firms putting some form of a flexible wage system in place, the earnings of workers in Singapore have moved more closely in tandem with the fortunes of their employers.

Last year was a choppy one for businesses, with the share of loss-making companies creeping up for a third year in a row. Almost a quarter - 24.3 per cent - racked up losses, compared with 21.5 per cent in 2015.

This was the highest proportion of companies in the red in the past 10 years - and it hit workers directly in the pocket.

A bigger proportion of companies cut workers' pay last year: Around 17 per cent compared with 11 per cent in 2015. The cuts were also steeper: 5 per cent in 2016 compared with 4.7 per cent the previous year.

Of 1,232,800 workers across 4,800 companies surveyed, 13.1 per cent took a pay cut, compared with 11.1 per cent in 2015.

While the flexible wage system docks a worker's pay when times are tough, it also serves to protect jobs and keep firms competitive as they can cut costs without trimming headcount. Since 2004, the proportion of firms with a flexible wage system has never been higher, and they typically adjust wages when they are not doing so well.

Despite this buffer, some 19,170 workers were made redundant in 2016, compared with 15,580 the previous year.

Meanwhile, the proportion of profitable firms dropped from 78.5 per cent in 2015 to 75.7 per cent last year. For workers, this meant that 75 per cent of them got a pay raise in 2016, down from 77 per cent the previous year.

The survey findings, given in the annual Report on Wage Practices released yesterday, also show that the pay rise workers received was not as good as in 2015.

Last year's nominal pay increase was 4.9 per cent, a decline from 5.6 per cent the previous year.

Bonuses stayed about the same at 2.16 months of basic wage last year. But a bigger proportion of companies said they tied bonuses to market conditions and their own performance, compared with an employee's performance.

The economy grew by a sluggish 2 per cent last year, but is expected to do slightly better this year.

DBS senior economist Irvin Seah said that this should improve wages in externally-oriented sectors like financial services, which are buoyed by stronger global demand.

But other sectors like domestic services will still struggle as they face structural challenges.

"Some clusters are disrupted by new technology and will continue to find it tough going forward," Mr Seah said, citing the retail sector competing with e-commerce.

"Any improvement in wages will be uneven," he added.

Singapore University of Social Sciences labour economist Randolph Tan also noted that unemployment may worsen as Singapore grapples with a mismatch between jobs created and skills that workers have.

"It will not make much sense to expect significant wage growth until the situation has stabilised a bit more," he said.

Fewer low-wage workers received pay rises in 2016
By Charissa Yong, The Straits Times, 31 May 2017

A bigger segment of low-wage workers did not receive pay rises last year as more companies struggled to stay afloat, according to the Ministry of Manpower's (MOM) annual report on wage practices released yesterday.

About 60 per cent of companies with workers earning a basic monthly pay of $1,100 and below said that they did not give, or did not intend to give, these employees wage increases last year. In 2015, only 53.5 per cent of companies had said the same.

Companies cited poor business for not raising the pay of low-wage workers. Some said they were already paying the market rate.

MOM surveyed 4,800 companies with 10 or more workers and found that the less profitable a company, the less likely it was to increase the pay of its low-wage workers.

About half the profitable companies which did better last year than in 2015 granted pay rises. But this proportion plunged to just over a quarter among loss-making companies.

The National Wages Council's wage guidelines for 2016-2017 had recommended a built-in monthly pay rise of $50 to $65 - opting for a range instead of a fixed sum like in past years. About 21 per cent of companies gave their low-wage workers salary increases of at least $50, up from the 18.5 per cent in 2015 who stuck to that year's guideline of a hike of least $60.

Low-wage workers in the construction industry were the least likely to get a pay rise, with 73 per cent of companies in the industry saying they did not grant such hikes. Between 60 per cent and 70 per cent of companies in the transportation and storage, wholesale and retail trade, and accommodation and food services industries said likewise.

On the flip side, about 40 per cent of companies in administrative and support services gave low earners a built-in wage increase of at least $50 last year.

MOM highlighted this as significantly higher than the hikes of between 10 per cent and 27 per cent given in other industries.

This was mainly driven by the security sector, where more firms raised the basic wage of their low-wage workers to meet the requirements of the Progressive Wage Model (PWM). This model boosts the wages of low-wage workers by setting minimum pay levels for the cleaning, security and landscape sectors. Firms must abide by the wage guidelines to get licences to operate.

Singapore University of Social Sciences labour economist Walter Theseira said: "The Progressive Wage Model is probably more effective in improving wages than the moral suasion of the National Wages Council because companies have no choice (but to raise wages) if they want to get licences or government contracts."

He added that because the model covers several important groups, it puts upward pressure on wages for workers in other sectors.

"Raising the PWM when warranted will effectively increase wages for low-wage workers. The goal with the model was, after all, to set a de facto minimum wage in the covered sectors, which it has achieved," he added.

* Civil servants get 0.5 month mid-year bonus in 2017
Higher bonus reflects better economic outlook
Unionists welcome larger payouts for civil servants; lower-wage staff also get pay hikes
By Danson Cheong, The Straits Times, 16 Jun 2017

The mid-year bonus for Singapore's civil servants will be slightly higher than last year's, partly reflecting emerging signs of an improvement in economic outlook.

All 84,000 civil servants will receive a bonus of 0.5 of a month's pay, a tad higher than the 0.45 month last year, the Public Service Division (PSD) said yesterday.

About 1,485 lower-wage workers will also get a built-in wage increase of $15 to $20 a month on top of their annual pay increments.

The bonus and pay increases will take effect next month.

Unionists welcomed the higher mid-year payouts.

"Though the increase is not huge, I think it is critical to send a signal to our workers that we will give them a bit more when we can," said Mr Yeo Chun Fing, general secretary of the Amalgamated Union of Public Employees.

The PSD said its decision was taken after considering the economic situation and in "close consultation" with public sector unions.

Singapore's economy grew by 2.7 per cent in the first quarter of this year compared with 1.8 per cent in the same period last year. It is expected to grow by 1 per cent to 3 per cent for the full year.

Also, labour demand is expected to remain uneven across sectors, while redundancies are expected in some sectors as the economy restructures.

Meanwhile, total growth in employment has moderated, even as the unemployment rate trends upwards.

The built-in pay rise for lower-wage workers is smaller than the sum recommended by the National Wages Council.

It had called for an increase of $45 to $60 for workers earning a basic salary of up to $1,200 a month.

But the PSD said all civil servants already earn more than $1,200 a month.

Those who will get the wage increases are Grade IV and Grade V officers in the Operations Support Scheme. They perform administrative support duties such as office maintenance and registry duties.

There are about 900 Grade IV officers, with a monthly salary of between $1,466 and $1,863. They will get a built-in wage increase of $15.

Grade V officers will get a $20 pay rise. There are about 600 such officers, who earn between $1,230 and $1,561 a month.

The PSD said these built-in pay increases signal the Government's continued commitment to help lift the pay of low-wage civil servants.

It also said the year-end bonus for civil servants would be decided after taking into account Singapore's economic performance in the second half of the year.

Mr G. Muthukumarasamy of the Amalgamated Union of Public Daily Rated Workers said the mid-year bonus was "reasonable".

Ms Cham Hui Fong of the National Trades Union Congress is glad the Government is committed to helping lower-wage workers. She said: "We will work closely with government agencies to press on with efforts to increase productivity to ensure workers remain relevant with training and skills upgrading."

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