TL;DR – Unemployment may continue to rise. Amidst the difficult economic climate, NTUC Deputy Secretary-General Desmond Tan acknowledged employers’ efforts in supporting the National Wages Council guidelines.
The labour market is in flux. In Q3 2023, total employment has increased, but so did retrenchments and unemployment. Unfortunately, the unemployment uptrend may continue to rise further and the labour market may still be looking uncertain for a while!
As such, the National Wages Council (NWC) has called for employers to:
- Implement the Flexible Wage System (FWS) to promote fair and sustainable wage increases. The FWS enables employers to transfer the wage increases and part of fixed wages into variable wage components. Employers can then make quick adjustments during uncertain periods to sustain their business yet be able to provide workers with fair wage increases or variable payments.
- Press on with sustained wage growth for lower-wage workers and workforce transformation
- Provide support for cost-of-living pressures.
NWC shared these recommendations in its annual wage guidelines for 1 December 2023 to 30 November 2024.
Sustaining wage growth for lower-wage workers
The pandemic has underscored the value of our lower-wage workers. From cleaners to security officers, we counted on them to support essential services. In uncertain times like now, lower-wage workers deserve our support even more. NWC’s recommendations to sustain lower-wage workers’ wage growth complement the Tripartite Workgroup on Lower-Wage Workers’ (TWG-LWW) progressive wage initiatives like the Progressive Wage Model (PWM) and Progressive Wage Credit Scheme (PWCS).
Helping with rising costs
To help workers better cope with rising cost of living, NWC recommended that employers give a one-off lump sum payment to all workers, with bigger amounts for those in the lower-to-middle-income bracket.
The sandwiched class is not forgotten as they probably feel the money squeeze too. NTUC President Mary Liew has also called on employers to adopt the latest NWC guidelines for all workers, especially the middle-income and sandwiched class, to ensure they enjoy fair, inclusive, and sustained wage growth.
Training, upskilling and staying relevant is key
Amidst a more challenging economic environment, NTUC Deputy Secretary-General Desmond Tan acknowledged employers’ efforts in supporting the guidelines.
He said: “We do appreciate that this year’s guidelines prescribe sustained wage increases and built-in wage increases to give our workers assurance, that, as much as they put in the hard work and efforts on the ground, they will be recognised and rewarded by their employers.”
MAS recently warned that the jobs and incomes of middle-income workers could be impacted by “structural shifts” in the next phase of Singapore’s economic growth, such as generative artificial intelligence and other technological changes.
These could either have career-boosting effects, or result in job displacement if workers are not equipped with the right skills when they struggle to keep up.
Mr Tan also stressed the importance of improving productivity to sustain wage growth in the long run. Initiatives like the Company Training Committees don’t just support businesses in their transformation, they also support job redesign, upskilling workers, and ultimately wage increases as an outcome of this training.
The recommendations from National Wages Council guidelines 2023/24 aim to strike a balance between sustainability for businesses and ensuring a fair and reasonable recognition for employees.
This is also with greater emphasis on lower to middle income wage employees to ensure their wages continue to grow in a high-cost environment where they are impacted the most.