The Singapore Workforce 2013 Report released on 29 November 2013 by the Ministry of Manpower revealed that the labour force participation rate rose for a second consecutive year to a new high in 2013, accompanied by stronger real income growth and with more older workers and women employed.
But even with MOM’s encouraging figures, the lower wage workers bear the brunt of pressures such as inflation and rising cost of living. Left unchecked, it could effectively make them the `working poor’.
Faced with this reality, NTUC Deputy Secretary-General Heng Chee How,in a Facebook posting, identified two key areas that must be changed “to uplift both the earnings and hope of a brighter future of low-wage workers".
The first is to improve the value of the job to yield better pay. “This is why it is so important for companies to improve productivity and career progression. Otherwise, they cannot shake free of the vicious cycle of low morale, high turnover, and difficulty in recruiting and retaining workers," DSG Heng elaborated.
“Second, the capabilities of the workers must improve so that they can do the higher value jobs proficiently and demonstrate value-for-money. This is why skills upgrading is critical. For low-wage sectors like cleaning and security services, regulation must also play a part to overcome the scourge of cheap-sourcing”
An inter-connected factor is the fact that more people are living longer, and it follows that more savings are needed to cope with day to day living, healthcare costs and other expenses.
While increasing the re-employment age allows people to work longer, the current system is such that the older the worker and the longer he works, the lesser the employer’s CPF contribution rate gets.
DSG Heng, who is leading NTUC’s push for the legally mandated re-employment age band to go beyond the current 62-65 years of age to 62-67 years of age, said: “The bottom line is that people living longer will need to find resources to pay for the additional years. If they can work for more years, that would help increase lifetime earnings.
“CPF is part of pay. The employers' CPF contribution rates are reduced in tiers for workers above age 50. The objective was to offset the effects of a seniority-based wage system and improve employment prospects for older workers. However, that also meant that older workers earn and save less as they age.
“I hope that the employers' CPF contribution rate for older workers can be further reviewed and improved in the light of these factors. I believe that this can be done while still maintaining a viable balance between savings and employability.”
Original article written by Marcus Lin, and can be found in NTUC This Week (13 December 2013)
