Government Accepts the National Wages Council Guidelines for 2024/2025

1. The Government accepts the National Wages Council (NWC) 2024/2025 Guidelines.

2. The labour market continued to expand in the first half of 2024, and labour demand remained strong, with the high number of job vacancies holding stable in the second quarter of 2024. Meanwhile, overall labour productivity, as measured by real value-added per actual hour worked, rose by 3.0% on a year-on-year basis in the first half of 2024. Over a longer period from 2016 to 2023, overall labour productivity rose by 2.1% per annum, sustaining real income growth (mean) of 0.9% per annum over the same period. However, strong nominal wage growth in the first half of 2024 has led to an increase in unit labour cost, creating near-term cost pressures on businesses. This underscores the need to press on with business and workforce transformation so as to sustain productivity-driven growth.

3. The Ministry of Trade and Industry has projected that the Singapore economy will expand by 2.0% to 3.0% in 2024. Singapore’s external demand outlook is expected to remain resilient. Looking ahead to 2025, the Singapore economy is expected to continue to expand at a broadly similar pace, though downside risks in the global economy remain.

4. The Government stands with tripartite partners to call on employers to reward employees with wage increases or variable payments that are fair and sustainable. Employers should take into account the sustained productivity growth over the longer term, the improved economic outlook and expected moderation in inflation in 2024 in assessing wage adjustments this year.

5. At the same time, given near-term cost pressures on businesses and the continued downside risks in the global economy, all employers should adopt the Flexible Wage System (FWS) to provide wage flexibility. The FWS enables employers to make quick wage adjustments during business downturns to sustain their businesses and save jobs, and restore wages in tandem with business recovery to retain talent. Employers who need support to implement the FWS can refer to the FWS Guidebook and approach tripartite partners and Tripartite Alliance for Fair & Progressive Employment Practices for advice.¹

6. To ensure continued wage growth that is sustainable, the Government calls on employers to press on with efforts to transform their businesses and upskill their workforce for higher value jobs to as to increase labour productivity. Employers and employees can tap on various enterprise grants and jobs and skills programmes provided by Government agencies.

7. As part of our social compact, we must press on with the national effort to uplift lower-wage workers so that every worker enjoys the fruits of Singapore’s growth. In October 2020, the Tripartite Workgroup on Lower-Wage Workers recommended a renewed Progressive Wage strategy to uplift lower-wage workers and sustainably narrow the income gap. Today, up to 9 in 10 full-time lower-wage workers benefit from the Progressive Wage Model, Local Qualifying Salary, and/or Progressive Wage Mark accreditation scheme.

8. The NWC’s recommendations for lower-wage workers balance meaningful wage increments for lower-wage workers with business sustainability. To support employers in uplifting lower-wage workers, the Government introduced the Progressive Wage Credit Scheme in 2022 to co-fund wage increases of eligible lower-wage workers from 2022 to 2026. The scheme provides transitional support to businesses in the near term – this gives employers time to invest in upskilling employees and improving firm-level productivity so that the wage increases are sustainable in the long term.

9. The Government will continue to work with tripartite partners to champion fair, inclusive and sustainable wage growth for our workers, as recommended by the NWC, while ensuring that our businesses stay productive and competitive.