Low-wage workers to get $50 pay rise?

If the Government says yes to recommendations from the National Wages Council (NWC), workers earning below $1,000 are likely to see their pay rise by at least $50 plus a percentage increase.

Sources told The Sunday Times that the NWC has accepted a proposal from the National Trades Union Congress (NTUC) to increase the basic pay of low-wage workers by $50.

The recommendations have been signed by all NWC members, who include employer group representatives, unionists and public-sector officials, and awaits approval from the Cabinet, where an announcement is expected to be made this week.

If approved, it will be the first time since 1984 that the NWC has recommended a minimum quantam of pay rise. They had recommended that companies raise the pay of workers by $27 plus 4 to 8 per cent then.

From 1985, NWC had stopped setting wage specific requirements and left it to unions and employers to negotiate based on broad recommendations, reported The Sunday Times.

According to the Manpower Ministry's latest Report on Wages 2010, there are more than 296,000 workers earning below $1,000.

A $50 pay rise would mean that those earning $1,000 will see a real increase in pay, said a source who is familiar with the annual wage talks.

President of Association of Small and Medium Enterprises (Asme) Mr Chan Chong Beng said that a $50 increase would be manageable for most SMEs.

However, he added that it would not be enough to achieve productivity gains and preferred a higher payout which would allow employers to do more to increase productivity.

Chief executive of security company Soverus Mr Paul Lim is worried about the adjustment period when companies face higher labour costs while remaining locked into existing contracts, and hoped unions would be flexible during wage negotiations.

His company will see a 3 per cent hike in wage bill for 140 full-time security officers who earn a basic pay of up to $800 a month.

Mr Lim says he supports the pay rise for security officers as this would help raise professionalism too.

"It is for this reason that I am prepared to stomach what I need to stomach," he added.

MP for Bishan-Toa Payoh GRC Zainudin Nordin, who is also the chairman of the Government Parliamentary Committee for Manpower, said he would welcome the pay rise too.

"It will help low-income earners with living expenses, but they also have to be prudent and don't overspend," he said.

However, labour MP Zainal Sapari, who heads the NTUC unit for contract, casual and low-wage workers, said that he is concerned about workers in companies without unions.
He asked: "Who is going to ensure that these companies follow NWC guidelines?"
Mr Chan said these companies will face pressures from their workers and will end up having to do something to match the market rate, or else they will lose workers too.