Government Accepts National Wages Council's Recommendations For 2014/2015

30 May 2014

1. The Government has accepted the National Wages Council (NWC)'s recommendations for 2014/2015.
2. The Government endorses the focus of the NWC's guidelines on raising productivity growth in a tight labour market. With the labour market expected to tighten further in 2014, this will place upward pressure on wages. Productivity needs to improve in order for wage growth to be sustainable and not erode Singapore's economic competitiveness.
3. As such, the Government supports the NWC's recommendation that real wage increases should be in line with productivity growth over the long term, and that employers should share productivity gains fairly with workers and in a sustainable manner. The Government urges employers, unions and workers to work together towards this goal.
4. Quality growth driven by productivity and innovation is important if our economy is to restructure towards higher value-added activities, and generate higher wages for our workers. The Government today provides a range of support to help the industry make productivity improvements and our workforce stay right-skilled and resilient. This includes the ongoing $7.3 billion Transition Support Package (2013 to 2015), which provides further assistance for our companies to manage this critical period of economic restructuring. Companies should make full use of the various funding and assistance programmes available.
5. The Government supports the NWC's move to uplift the wages of low-wage workers by calling on employers to grant a built-in wage increase of at least $60 for workers earning a basic monthly salary of up to $1,000. This makes it clear that there should be continued efforts to improve wage outcomes for low-wage workers. The Government also agrees with the NWC’s recommendation to do more for the group of low-wage workers earning above $1,000.
6. The Government has adopted a multi-pronged approach to help low-wage workers improve their wages. This includes strong funding for skills upgrading through the Workfare Training Support (WTS) Scheme; and sharing of productivity gains through the Inclusive Growth Programme (IGP). The Government recognises the need to complement these efforts with the direct commitment of employers to improve wages.
7. The Government also recognises that for the NWC recommendations to be effective, buyers of outsourced services will also need to play a part. The Government will lead by example, not only as an employer but also a service buyer. It will continue to take reference from the NWC guidelines in its annual wage adjustment exercise. The Government will also strongly encourage service suppliers to the public sector to adopt NWC recommendations on wage increments for their workers.
8. The Government supports the NWC's recommendation for employers and unions to look into appropriate measures to boost employees' ability to pay for their MediShield Life (MSHL) premiums. On our part, the Government is committed to providing support to ensure that premiums for enhanced benefits remain affordable for all Singaporeans. As a major employer, the Government will also help its employees benefit from the life-long coverage that MSHL provides.
9. Over the years, strong tripartite support has ensured that NWC wage guidelines have been implemented to reward workers for their contributions while at the same time helping our companies remain resilient and competitive. This balanced approach is essential for the continued progress of our nation and to achieving shared and inclusive growth. The Government is confident that with the commitment of the tripartite partners, the 2014/2015 NWC guidelines will be successfully implemented.