Low-paid workers in Singapore were unlikely to receive pay rise last year, research reveals

Author: Sophie Parrott | Date: 07 Jun 2017

Government accepts advice from National Wages Council to boost pay for basic earners

A large proportion of lower-paid workers in Singapore did not receive pay rises last year, as many organisations struggled to remain profitable.

The Ministry of Manpower’s (MOM) annual report (which surveyed 4,800 organisations) showed that 60 per cent of employers said that they did not, or did not intend to, reward low-wage workers with pay rises in 2016.

This was a 6.5 per cent increase on the number of employers who said the same in the previous year.

The Singaporean Government has accepted advice from the National Wages Council (NWC) for 2017-2018, to raise wages for workers earning a basic salary of $1,200 or less.

The NWC has recommended the government grant a built-in wage increase, of between $45 and $65, to help basic-wage workers.

Upping the ante to transform businesses and raise productivity levels, the NWC has pledged to ensure that continuous support is available for workers who are affected by economic restructuring, under the Adapt and Grow and SkillsFuture initiatives.

Research by recruiter RGF HR Singapore found a more optimistic picture for this year, as 500 Singaporean managers said more sectors are expected to increase salaries.

The largest salary increases are expected to take place in the manufacturing, engineering and industrial sectors, where workers will enjoy a 30 per cent increase.

The technology, science and healthcare sectors have also forecast salary increases of between 11 and 20 per cent.

Puneet Swani, partner and growth markets talent leader at Mercer, said: “Changing business models and restructuring in financial services has meant the sector may not be hiring at rates seen in the last three years, but we continue to see the highest level of pay increases, as retaining high-performing talent has become even more critical.”

The MOM introduced the Progressive Wage Model (PWM) in 2015 as a wage progression pathway that aimed to boost productivity and skills.

Employers are obliged to adhere to the PWM for Singaporeans and permanent residents in the cleaning, security and landscape sectors.

In an interview with The Straits Times, Walter Theseira, labour economist at the Singapore University of Social Sciences, said: "The PWM is probably more effective in improving wages than the moral suasion of the National Wages Council because employers have no choice [but to raise wages] if they want to get licences or government contracts."