The National Wages Council (NWC) guidelines that were released on 23 May 2012 centred on levelling up the pay packets of the lowest strata in the economy.
For many years now, recommendations made by the Council have moved away from a quantitative approach in the 80s to that of a qualitative approach.
After deliberations with unions and employers this year, the NWC has made a recommendation based on a quantitative measure for workers who have not “kept pace with economic progress”, said the Council Chairman Professor Lim Pin.
He further explained why the income bracket of up to $1,000 was decided and how the minimum built in increase value of $50 was derived.
He said: “This particular group is the lowest of the low-wage workers and we have to put in our efforts to bring them up.
“Now, a quantitative guideline for the rest of the workers is just not practical as the economy is heterogeneous - cleaners and security guards on one end and on the other end we have professionals with different kinds of salaries, so we can’t mandate a number.”
He added that in this particular case, they saw a real need to uplift the special group of low-wage workers.
“Why $50? We want to help these workers but we also have to do it in a sustainable and balanced way for the long-term.
“We feel this number is the most appropriate at this point in time and we may have to adapt to changes over time,” he said.
NTUC Assistant Secretary-General Cham Hui Fong also shared that many low-wage workers in that income group will benefit from this mandate as their wage increases in the past, despite the recommendations for higher wages, fell below $50.
She stressed that the Labour Movement would be more aggressive in pushing for wage increases for these workers.
“In the past, the settlement with the percentage increase and dollar quantum was not very favourable. It may be $10 or $15.
“This time we chose this group of people earning $1,000 and $50, because then this group of people would have at least a five per cent increase.
“Coming from the unions, of course, we will not stop there. We will ask for a $50++.What the percentage is will depend on how well the company is doing,” she added.
Employers have also generally accepted the recommendations as revealed by Singapore National Employers’ Federation (SNEF) President Stephen Lee.
“The SNEF strongly endorses this year’s NWC recommendations and the federation is concerned about the bottom 20 per cent of our workforce.
“These workers have not kept up with the pace of the economic upgrading and hence the special emphasis on them.
