Strategic Review of National Wages Council

Mr Speaker, the key role of the tripartite National Wages Council (NWC) is to ensure orderly wage increases in line with Singapore's economic development. While NWC wage guidelines are not mandatory, they are widely referred to by companies in both the unionised and non-unionised sectors. They are also gazetted under the Employment Act and form the basis for wage negotiations between unions and management.

Over the last decade, notwithstanding the three economic recessions that we have been through, workers have enjoyed real and sustainable wage gains that are generally in line with productivity growth.

Income from work, including employer CPF contributions, of full-time employed residents at the 20th percentile level rose by 35% over the last five years from 2006 to 2011, which is about 6.1% per annum. Factoring in inflation, the real income growth at the 20th percentile level was 14% or 2.6% per annum. This was despite the financial crisis in 2008/2009. Offset by the income loss in the preceding five-year period, the real income growth over the decade was more modest, at 2.4% or 0.2% per annum.

The NWC has been in place for many years. And in recent years, the NWC has been paying particular attention to low-wage workers. For example, this year, the NWC recommended specifically that employers grant a built-in wage increase of at least $50 to workers earning a basic monthly salary of up to $1,000. While it is too early to know the full impact of the guidelines, indications from the Singapore National Employers Federation and the National Trades Union Congress are that employers have generally been supportive of this recommendation.

The NWC is not a static institution. It will continue to evolve and finetune its recommendations to meet the changing economic and social needs of the country.

Sir, I thank the Acting Minister for the response. I would like to ask Acting Minister this. Since the NWC was first formed in 1972, and all the way through to 1985, 1986 during the major recessions, the NWC guidelines have always been quantitative rather than qualitative. But we moved towards a more flexible wage system thereafter. It is only this year that we have returned to a quantitative recommendation. Does the Acting Minister feel that this should be the way forward over the next five years, that is, for there to be more quantitative guidelines, especially for low-wage workers?

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Sir, I would like to thank the Member for the supplementary question. We would monitor the situation. NWC is not a static institution. The measures put in place are aimed at uplifting the wages of the various levels. So, the recommendations that NWC had put forward this year had been a slight deviation in that it is specifying wage increases, not just in quantitative terms but specific dollar terms. Whether this becomes a norm would depend on how we see the situation unfolding over the coming years. If there continues to be a need for that, I am sure the NWC would consider in future whether to specify a quantum. As with all things, we will look at the situation to see how incomes progress at the different levels.

I would like to ask the Acting Minister this. Many low-wage workers, especially those working under outsourced services contracts, are experiencing stagnant wages. Given the fact that we are moving towards giving a quantitative recommendation under NWC, can MOM consider making it mandatory for both service providers and service buyers to bear the cost equally of adopting NWC recommendations, especially those pertaining to low-wage workers?

Sir, I would like to thank the Member for the supplementary question. We will take onboard the suggestion. What I would say is that we would leave it very much to the market to look at this. We are quite aware and we have been in discussion with the unions and with the employers on the issues affecting low-wage workers. There is a range of measures that we have put in place. Certainly, we know that Workfare remains something that is important. And we will be reviewing that quite extensively for next year. At the moment, we are also working closely on the cleaning and security sectors, accreditation being a big part of it. Those are the means and, through a combination of the various measures, we believe we can uplift the wages.

As to whether it is borne by service providers and so on, that is something, for the moment, we will leave it to the market to decide. But the key thing is whether we are able to move and uplift the wages for the lower income levels. The programme we have put in place is something that is aimed towards achieving that, and we are reasonably confident that that will happen. We will take onboard the consideration for future use. But, for now, let us work the existing processes and see how that unfolds.

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