Guidelines Aim for Recovery-Aligned Wage Adjustments
The National Wages Council (NWC) has urged companies in recovering sectors to reinstate previously cut wages and to increase salaries for lower-wage workers by up to 7.5 per cent. As Singapore’s economy shows signs of recovery, NWC emphasizes that wage adjustments should align with business recovery rates under a flexible wage system.
NWC’s latest guidelines, which have been accepted by the Government for the period from December 1 next year to November 30, prioritize wage restoration for firms that have recovered or are recovering. This involves first restoring fixed wages, then variable components like the Monthly and Annual Variable Components. Additionally, NWC recommends reversing wage-saving measures like reduced work weeks or unpaid leave for companies performing well, suggesting they provide wage increases and bonuses based on performance, prospects, and productivity.
However, acknowledging uneven recovery, particularly in tourism and aviation, NWC advises struggling firms to utilize government support for transformation and retain employees through cost-saving and reskilling initiatives.
Focus on Lower-Wage Workers
For those earning up to S$2,000 monthly, NWC recommends a wage hike of 4.5 to 7.5 per cent or S$70 to S$90, whichever is higher, to ensure their income grows faster than the median, helping close the wage gap. Companies in good health should target the higher end of this range, while those in recovery might aim for the middle.
In sectors still facing challenges, NWC suggests a wage increase of up to S$50 for lower-wage workers rather than further wage reductions. The shift from basic to gross monthly wage as a benchmark is intended to provide a more equitable measure across different worker groups.
Job Transformation and Skills Development
NWC also calls for a concerted effort from all stakeholders to transform jobs and upskill workers, noting a decline in training provision from 79.1% in 2019 to 65.4% in 2020. To counter this, NWC encourages the creation of Company Training Committees to enhance workplace learning.
The National Trades Union Congress (NTUC) backs these guidelines, stressing the need for sustainable wage growth to maintain job security. They advocate for fair compensation aligned with business outcomes and emphasize uplifting lower-wage workers.
The Singapore National Employers’ Federation (SNEF) agrees to work collaboratively for a stronger economic recovery, emphasizing agility, resilience, and inclusivity among employers to navigate future challenges and opportunities.
