NWC recommends S$60 wage hike for workers earning up to S$1,100

SINGAPORE — Amid long-standing calls to better reflect current labour market realities, the National Wages Council (NWC), in recommending a minimum-wage increase for low-wage workers this year, has raised the monthly salary threshold to S$1,100.

The council recommended a minimum increment of S$60 to the monthly salary, the same as it proposed last year and in 2013. In previous years, it set the salary threshold for receiving this increment at S$1,000.

Since the NWC began recommending quantitative wage increments three years ago, the proportion of workers earning a basic monthly salary of up to S$1,000 has shrunk, from 9.8 per cent in 2012 to 6.8 per cent in 2014. In previous years, the NWC had recommended raising wages but did not specify a sum.

Announcing the recommendations at a press conference held at the Ministry of Manpower (MOM) headquarters yesterday, NWC chairman Peter Seah, who was appointed in April, said the council wanted to focus on low-wage workers given how they are the “most vulnerable group and should continue to benefit from Singapore’s growth”.

National Trades Union Congress (NTUC) assistant secretary-general Cham Hui Fong, who was at the press conference, had raised concerns over low-wage workers who over the years had crossed the S$1,000 threshold.

The guidelines had called for an equitable pay increase for those earning over S$1,000, but did not spell out what is considered as such, she pointed out. Noting that these workers are vulnerable, she said: “If this group ... are indeed doing something to upskill themselves and management is also making efforts to improve the productivity, then I think we ought to ensure that there is a reasonable wage increase for them.”

As for the recommended increase of at least S$60 to the monthly salary, the MOM said the quantum was deliberated extensively by the NWC. “(It was) based on what the employers and unions feel is a reasonable target that will challenge employers to do more for this group of workers, but is at the same time achievable by a good proportion of companies,” a ministry spokesperson said. Asked how many workers earn up to S$1,100 a month, the ministry spokesperson said: “The information is not publicly available.”

The Government has accepted the recommendations, adding the wage increase recommendation for low-wage workers makes clear there should be continued efforts to improve wage outcomes for this group.

The NWC also welcomed the idea of employers giving an SG50 gift in cash or in kind to celebrate Singapore’s Jubilee, although it is not part of the NWC’s recommendations. For instance, DBS Bank gave all employees ranked vice-president and below a one-time reward of S$1,000.

For low-wage workers who earn above S$1,100, the council recommended this group be given an “equitable and reasonable” wage increase or a one-off lump sum based on skills and productivity, or both.

Other recommendations include encouraging unions and employers to work towards restructuring employer medical benefits into portable medical benefits to make medical expenses more cost-effective.

“With the ageing population and of course with the concerted effort to really push re-employment beyond a certain age, we think it is really useful for us to review the medical benefits that we have now,” said Ms Cham.

Commenting on the increased salary threshold, Barclays economist Leong Wai Ho said it is in keeping with the spirit of ensuring that the low-wage group earn decent increments, while Nanyang Technological University (NTU) economist Walter Theseira said raising the threshold is in line with the rising cost of living.

While the recommended quantum remains unchanged, Mr Leong said it ultimately boils down to arriving at a number employers find sustainable and are comfortable with. The push for greater productivity over the past few years has meant that smaller companies have to deal with higher costs in the form of training, retooling and investing in new equipment, he said. “These things are expensive and I think all that has to be taken into consideration as well. You can’t just keep pushing for higher wages,” he added.

Correction: In an earlier version of this report, we wrongly referred to the NWC as NWS in one instance. We apologise for the error.