NWC guidelines seek to boost wages, uplift lower-wage workers
Singapore's workers can expect to see wage increases in the coming year, with a particular focus on boosting the incomes of those in lower wage brackets.
The National Wages Council (NWC) guidelines, released on Oct 10, recommend a range of increases for 2024/2025, while also urging businesses to prioritise transformation and upskilling for long-term sustainability.
The NWC, a tripartite body composed of representatives from employers, unions, and the government, focused their wage increase recommendations specifically on lower-wage workers, defined as those earning up to $2,500 per month.
For employers who have performed well, the NWC recommended a built-in wage increase at the higher end of 5.5% to 7.5% of gross monthly wages, or a wage increase of at least $100 to $120, whichever is higher. Employers who have not done as well are encouraged to provide lower-wage workers with a built-in wage increase at the lower end of the 5.5% to 7.5% range.
This move aims to share the gains from productivity growth and improve the livelihoods of lower-wage workers, a key priority in Singapore’s social compact.
The council encourages companies to adopt the Flexible Wage System to allow for wage adjustments in response to fluctuating economic conditions
Addressing concerns about the potential impact of wage increases on foreign investment, Singapore National Employers Federation (SNEF) vice-president Kuah Boon Wee emphasised the need for productivity growth to support sustainable wage increases.
“Wage increases must be sustained by productivity growth,” said Mr Kuah.
“I don't think we need to be overly fixated on Singapore becoming a costly place. The message really should be that Singapore-based enterprises must be productive and benefit all.”
The NWC guidelines place a significant emphasis on uplifting lower-wage workers, with recommendations for higher percentage wage increases for those earning comparatively lower wages.
To support businesses in meeting the guidelines, SNEF president Tan Hee Teck encourages employers to focus on job redesign and upskilling, taking advantage of government grants and training programs available.
He further emphasised SNEF's commitment to working with tripartite partners to "ensure a thriving and competitive business environment that benefits both employers and employees."
The NWC acknowledged that the guidelines do not explicitly cover gig workers, leading to questions about how this growing segment of the workforce will be supported in the evolving economic environment.
While there were no specific recommendations for gig workers, NTUC assistant secretary-general Patrick Tay said the council is committed to ensuring that all workers benefit from Singapore’s economic progress.
“This year’s guidelines have a big focus on workers under formal employment relationships," stated Mr Tay. "We don't really regulate or get instructions for those on contract for service.”
NWC chairman Peter Seah emphasised the council’s focus on reducing the wage gap.
"We particularly address the issue of low-wage workers because we don't want to leave anyone behind. And if we move up the wages of low-wage workers, it will reduce the gap."
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