UNITED BENETTON of COLORS

24 May, 2007 GIVE PAY HIKES BUT BE PRUDENT, SAYS NWC

Workers deserve to get a pay rise as the economy is doing well,but it must not cause companies to lose their competitive edge, the National Wages Council (NWC) , said yesterday. This is the 2nd year in a row that it is urging companies to ensure that increases in basic wages lag behind productivity gains.

Noting that the workers took a pay cut after SARS hit 4years ago, NWM chairman Lim Pin said: "Its only appropriate that in good times, employers....express their appreciation and reward the worker appropriately." He was speaking at the press conference to make public the wage guidelines. He was flanked by Deputy Secretary-General Heng Chee How and Singapore National Employers" Federation president Stephen Lee.The NWC compromising representatives from the Government, employer groups and unions announces these guidelines yearly without specifying the amount of salary increases.

Their recommendations are watched closely as they are the benchmark for any adjustments employees can expect this year.For the third year running,the NWC wants companies to give low wage workers a bigger hike in pay. Professor Lim said," We have to minimize the ill-effects of a wide wage gap where the lover end has not been able to keep up with the inflation."

The NWC recommendations come amid a buoyant economy and a job market hungry for workers, both of which are driving wages up.Against this backdrop,the Government, which accepted the NWC guidelines,urged companies to hire and retain workers older than 62.This would help meet the current manpower needs,it said in a statement. The NWC, in making the same point, suggested that companies adopt wage systems tied to a worker's performance, not senority.

For low wage workers, the NWC also wants more of them to get onto the Central Provident Fund scheme,so they can receive Workfare, an income supplement for the older, needy singaporeans. The Government underscored its commitment to this effort. It will form a Tripartite Committee to tackle the issue headed by Minister of State (Manpower) Gan Kim Yong.

In releasing the guidelines, the NWC presented figures that showed total wages rose 4.5% last year, up from 4.3% in 2005.The pay rise was made up of a basic pay hike of 3.6%, and a average bonus of 2.18months.This has lead to wages surpassing productivity gains for the second year running.NWC members traced the gap partly to employers hiring in anticipation of continued good times. Said Mr.Lee,"Companies are more bullish....so they would keep their present workforce plus expand."

The intensified hiring led Professor Lim to remind "employers not to do things that they will regret in the long term." He added," If you,for example, up your built-in wages,when the time comes for you to have to adjust wages, you're tied down." This point was echoed by labor chief Lim Swee Say at a separate event yesterday. The NWC also wants workers' pay rise to the used to build up the monthly variable component (MVC). This MVC of up to 10% can be cut in a slump so companies can save jobs. The guidelines were supported by the NTUC and business groups.

This article is taken from the main page in the Straits Times on 24/05/07.

Posted by THE SAINT :: Thursday, May 24, 2007 :: ---------------oOo---------------