NWC guidelines urge 5.5% – 7.5% pay increase for lower-wage workers

By November 15, 2022Current
NWC guidelines urge 5.5% - 7.5% pay increase for lower-wage workers

TL;DR –In line with the current economic recovery, NWC advise employers to provide fair wage increases to reward their staff.

According to the new guidelines issued on Monday (14 Nov) by the National Wage Council (NWC), lower-wage workers earning up to S$2,200 a month should receive a salary increment of 5.5 per cent to 7.5 per cent, or at least S$80 to S$100, whichever is higher.

Mary Liew, president of the National Trade Union Congress (NTUC) said the labour movement agreed to a lower wage growth recommendation for lower-wage workers last year on the basis that a higher wage growth recommendation could be made this year if the economy has recovered.

She told reporters in a joint briefing fronted by representatives from NWC, NTUC and the Singapore National Employers Federation (SNEF) and the Ministry of Manpower (MOM), “Given that the economy has picked up significantly this year, we all honour the commitment that we made last year.”

Employers are worried

While the Singapore economy is recovering, the growth is expected to be slow these couple of years. With rising business costs and inflation, businesses are facing wage pressures in a tight labour market.

To achieve sustainable wage growth, wage growth must match productivity. Conversely, if wages are not keeping up with productivity, then employees would not be paid fairly.

To keep pace with wage growth, NWC recommends that companies invest in upskilling and reskilling their workers, said Peter Seah, Chairman of NWC.

NWC’s advice to employers

In the latest NWC guideline (for 2023), employers are encouraged to implement the Flexible Wage System. NWC acknowledges the uncertainties ahead, hence, the need for resilience and flexibility in wage structures.

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The Flexible Wage System includes a fixed component (fixed basic monthly salary), and a variable component (monthly variable component/ annual variable component) built into gross salary.

Help from the Government

In efforts of narrowing the income gap, employers can tap into the Progressive Wage Credit Scheme. It was introduced in Budget 2022 and provides $3.5 billion in funding over five years.

The scheme will co-fund wage increases for lower-wage workers.

NTUC helping in Business Transformation

Ms Liew urged employers to leverage the progressive wage credit scheme and consider channelling the wage increases towards basic wage components, which would improve long-term income stability for lower-wage workers.

Companies can also collaborate with NTUC by tapping on its Company Training Committee initiative to customise road maps covering new products and services, technology, talent, and other resource requirements to support business growth. The development of transformation plans will ensure the workforce to remain relevant and resilient, and employees can benefit from a clear career pathway.

Wage increases can overcome GST hike and inflation

 

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Nicole Lim

Author Nicole Lim

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