1 Jul 2006

Wage increase at 5-year high

Salaries have grown by 4.3% but most low-wage workers are still missing out
Weekend • July 1, 2006
Lee U-Wen

FIRST, the good news: Last year's wage increase in the private sector was the strongest recorded since 2000, as employees earned fatter salaries and took home bigger bonuses overall, compared to 2004.

The 4.3-per-cent growth in real wages last year also outpaced productivity growth for the first time in four years, according to the latest annual Report on Wages in Singapore — released by the Ministry of Manpower on Friday.

Now for the bad news: The majority of low-wage workers are still missing out on wage increments, despite strong calls from the National Wages Council (NWC) to employers to adequately compensate them and narrow the income gap.

Low-wage workers are defined by the ministry as workers who, in general, earn around $1,200 or less per month on a full-time basis.

On the whole, just 15 per cent of private sector firms that pay wage increases and have low-wage employees have adopted the NWC's guidelines, which were released in May. These increases were given out most commonly in the forms of basic wage, followed by a combination of both basic wage and bonuses.

National Trades Union Congress (NTUC) assistant secretary-general Halimah Yacob called the low take-up rate "puzzling".

"The only reason I can see is that companies feel that giving the dollar quantum to low-wage workers would mean the value of the job would be exceeded. But this is within the employers' control. They can enhance the job worth and justify the higher wages paid out," she told Today.

She also said: "It's not just about reluctance or the refusal to increase wages for these workers. Perhaps the companies don't even have a dedicated human resource department, or they want to re-work the pay structure but don't know how to do so. On our part, the unions will be helping these companies out."

Elsewhere in the 41-page report, the ministry said jobs requiring professional and specialist skills continue to command higher salaries, a clear indication of the premium that employers place on these qualities.

Rank-and-file employees, meanwhile, enjoyed a total wage increase of 3.9 per cent, while junior and senior management had a much higher rise of 8 per cent. Staff in firms that have implemented wage restructuring are also reaping the benefit.

Profitable firms with all three wage recommendations — the monthly variable component, a maximum-minimum wage ratio of 1.5 or less, and a variable bonus linked to key performance indicators — gave the biggest wage increases to their workers, the report said.

On the flip side, companies in the black that did not implement any of the recommendations at all were more restrained with their wage hikes.

On Friday, the ministry also released the Occupational Wage Survey report — meant to provide job seekers, employers and workers with a salary yardstick in the job market.

In June 2005, professionals received the highest median starting gross wage at $2,500 a month. At the other end of the scale, new entrants in less-skilled jobs took home lower wages, ranging from a median of $755 for cleaners and labourers to $1,335 for clerks.

For workers across the board, regardless of the number of years of experience, the median gross wage ranged from $1,000 for cleaners and labourers to a high of $5,699 for managers.

Visit www.mom.gov.sg/mrsd/publication for the full reports.

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