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Oral Answer by Mr Tan Chuan-Jin, Acting Minister for Manpower & Senior Minister of State, National Development, to Parliamentary Question on National Wages Council's Recommentations

Notice Paper No. 379 Of 2012 for the sitting on 15 Nov 2012 Question No. 785 For Oral Answer

MP: Mr Alex Yam

To ask the Acting Minister for Manpower (a) how effective have the National Wages Council's recommendations been in raising real wages for low wage workers over the past decade; and (b) whether a strategic review of the National Wages Council is needed to enable its recommendations to carry more weight with employers.

Answer 

  1. 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.
  2. 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.
  3. 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 or 6.1% p.a. Factoring in inflation, the real income growth at the 20th percentile level was 14% or 2.6% p.a. 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% p.a.
  4. The NWC has, in recent years, 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.
  5. The NWC is not a static institution. It will continue to evolve and fine tune its recommendations to meet the changing economic and social needs of the country.