Singapore: On Friday (October 29), the National Wage Commission (NWC) called on the restoration department to reduce wage cuts and asked low-wage workers to raise wages by up to 7.5%.

As Singapore’s economy is on the path of recovery, NWC stated that wages should be synchronized with the pace of business recovery and be based on a flexible wage system.

NWC stated that according to its latest guidelines, the first priority for companies that have recovered or are recovering is to recover any wages that were previously cut.

Employers who reduce their fixed wages as a special measure to save their jobs should also restore the fixed wages first, followed by the floating wages, such as monthly floating parts and annual floating parts.

After that, employers should eliminate wage-related cost-saving measures, such as shortening the work week, temporary layoffs, and unpaid leave.

For companies that perform well, NWC stated that they should provide fixed salary increases and variable payments based on business performance, prospects and productivity growth, and employee contributions.

These companies should also eliminate discretionary cost-saving measures, such as cutting quotas.

At the same time, NWC recognizes that the recovery is uneven, especially in the tourism and aviation-related sectors.

In its guidelines for companies that are still adversely affected by COVID-19, NWC urges them to continue to use government support measures to accelerate business and workforce transformation.

You can also implement “appropriate” cost-saving measures and retraining to retain employees.

The Ministry of Manpower stated in another press release on Friday that the government accepts the guidelines of the National Wage Commission, which covers the time period between December 1 and November 30 next year.

The Ministry of Manpower pointed out that the labor market has improved in the first three quarters of this year as the employment growth of residents and the unemployment rate of residents continue to ease. The layoffs have also been reduced to pre-pandemic levels in 2018 and 2019.

However, the ministry added that the recovery of the labor market across sectors has been uneven and is expected to remain so.

ENCOURAGING LOW-WAGE WORKERS
NWC stated that for workers with lower wages, their wages should increase faster than the median wage level to ensure continued wage growth.

It recommends that employers provide a fixed salary increase of 4.5% to 7.5% or S$70 to S$90 (whichever is higher) of total wages for workers whose total monthly salary does not exceed S$2,000.

It stated that even companies that performed well during COVID-19 and had solid revenue growth should aim for the upper end of the range.

For companies that are recovering or have already recovered, NWC stated that their target may be the mid-to-low end of the range.

NWC stated that the proposal takes into account various factors, including the expected medium-term wage growth rate, the current economic climate, and the pace agreed by the three parties to promote low-wage workers so that they can make progress on the basis of the median worker. .

Based on earlier recommendations made by the tripartite working group for low-wage workers, NWC calls on employers to provide higher wage growth percentages for workers with relatively low wages.

As some severely affected industries and companies are still considering extending the wage freeze period, NWC recommends that employees with a total monthly salary of S$2,000 and below increase their wages internally by up to S$50.

As for those who plan to further reduce their wages, they should implement a wage freeze on this group of workers.

NWC stated that based on the recommendations of the tripartite working group, it is changing the basic monthly salary to the total monthly salary as a new reference standard.

Chee Hong Tat, deputy secretary-general of the National Union of Trade Unions (NTUC), said in response to a question from the media about the reasons for doing so, that it will provide “a more standard measurement” to compare different groups of low-wage workers in different industries.

“So, from the worker’s point of view, the most important thing is his or her actual monthly income. This is the total package including allowances… and some (overtime pay), which can also include the employer Other forms of payment,” Mr. Chee said.

“(Using total monthly wages) will ensure that we increase the wages of this group of Singaporean workers over time to gradually catch up with the median income.”

Change jobs and upgrade skills
In addition to resuming wage cuts and increasing wages, NWC also called on all parties, including the government, employers, unions, and employees, to take decisive measures to change jobs and improve labor skills.

It expressed concern after the proportion of employers providing structured training to their employees declined in 2020 compared to the previous year.

According to NWC data, 65.4% of employers provided training for their employees in 2020, down from 79.1% in 2019.

The proportion of employees receiving structured training has also fallen from 55.8% in 2019 to 46.5% in 2020.

To solve this problem, NWC encourages employers to cooperate with the labor movement to establish company training committees to build their internal workplace learning capabilities so that employees can continue to keep up with the pace of transformation.

NWC stated that in addition, employers and employees must innovate and implement productivity plans, and work hard to improve wages and skills.

This includes redesigning jobs for new job roles within the company and retraining and upgrading employee skills, especially for those at greater risk of layoffs.

NTUC affirmed its support for NWC’s latest guidelines and added that in the current economic environment, wage growth needs to be balanced and sustainable to ensure worker safety and income stability.

In a media statement, NTUC called on employers to reward employees fairly based on the company’s business performance and prospects, and pay special attention to promoting low-wage employees.

“This is an important part of our social contract to keep Singapore cohesive as a united person,” it added.

NTUC has also encouraged more companies to cooperate with the labor movement, set up company training committees, and invest in productivity and skill enhancement.

The Singapore National Employers Federation (SNEF) stated that it will continue to work with the government, labor movement and employers to help the country become stronger.

SNEF President Robert Yap said: “Even if Singapore’s economy is recovering, employers must remain agile, resilient and inclusive so that employers and employees can unite to meet any challenges along the way.”

“By transforming businesses and improving employee skills, as the economy rebounds, employers will be more flexible to seize new growth opportunities. By increasing wage flexibility, employers can be more resilient in the face of future economic downturns,” he said .

“Through inclusiveness, employers can better motivate their low-wage workers to do their best at work.”

Singapore: The Monetary Authority of Singapore (MAS) stated on Thursday (October 28) that Singapore’s economy should return to the path of recovery and is expected to expand at a “slower but still higher than trend” rate in 2022.

MAS stated in its latest macroeconomic assessment that the country’s economy is expected to grow by “6% to 7%” in 2021.

The authorities added: “Unless the virus evolves or other global developments make downside risks a reality, it should experience slower but still above-trend growth in 2022.”

ECONOMIC OUTPUT RETURNS TO PRE-PANDEMIC LEVELS
According to the report, since the beginning of this year, Singapore’s economic growth has experienced “intermittent”, as a new wave of COVID-19 infection has led to several rounds of tightening of policies and subsequent relaxation of movement restrictions.

It added that due to these restrictions, domestic-facing activities are “restricted,” but external-facing trade-related and modern services have performed better and provided some support for overall growth.

However, the HKMA pointed out that the decline in economic activity in the second and third quarters was not as severe as during the circuit breaker period in the second quarter of 2020, because the measures this year are generally less stringent.

MAS stated that the company has adjusted “to some extent” by switching to other ways of doing business.

In the third quarter of 2021, overall economic output will return to pre-pandemic levels, although there are still significant differences in the performance of various industries.

MAS stated: “Although the trade-related modern service clusters were approximately 10% and 5% higher than the pre-pandemic levels in the third quarter, the domestic-oriented clusters were still approximately 10% lower than their pre-crisis levels.”

ECONOMIC OUTLOOK
With the reopening of the economy, it is expected that the economy will continue to expand in the coming quarters.

MAS added that domestic-oriented industries should see “a gradual pick-up in activity”, while the prospects for tourism-related industries have also improved slightly.

Singapore recently announced the expansion of its vaccination travel itinerary to more countries, including the United Kingdom and the United States.

The report added that due to the prevalence of large numbers of COVID-19 cases in the community, the recovery of consumer-oriented industries (such as food and beverages, retail, and land transportation) will be hindered in the beginning of the fourth quarter.

These restrictions mean that social gatherings and dining groups are smaller.

MAS said: “Nevertheless, online food and retail sales should receive some support, and businesses and consumers are increasingly inclined to this.”

A wider reopening of the economy by the end of the year should improve passenger flow for retail businesses and restaurants, although the demand for foreign tourists is expected to only gradually recover.

MAS stated that travel demand “is not expected to pick up rapidly or sharply in the short term”, and that travel-related industries are expected to have a “bumpy road to recovery.”

Singapore began to lift some border restrictions at the end of the third quarter of 2021. As of October 25, approximately 7,000 vaccination passes have been issued to short-term tourists. However, this accounted for less than 1% of monthly arrivals before the pandemic, MAS said.

MAS added that the strong rebound in tourism-related industries may only achieve a “greater” elimination of border barriers in 2022, and it is expected that only after 2022 will it be able to return to pre-pandemic output levels.

At the same time, the recovery of major trading partners and the “continuous strengthening” of global electronic demand will support trade-related and modern service industry clusters.

THE LABOR MARKET AND CORE INFLATION ARE EXPECTED TO PICK UP
MAS stated that as the domestic economy recovers, the labor market may continue to recover in the next few quarters.

The report pointed out that after rising to 3.7% in July, the resident unemployment rate dropped to 3.6% in August, indicating that the weakness in the labor market should continue to be absorbed.

The report added that residents’ wage growth also picked up in the second quarter, making wage levels “return to pre-COVID trends.” According to reports, companies in a range of industries have also ended the wage freeze and reversed wage cuts.

As the weakness in the labor market dissipates in 2022, residents’ wage growth may be firm.

MAS added that the cost of freight, consumer durables, energy and food commodities has risen and may remain high in the short term as the global mismatch between supply and demand continues. These domestic and import cost pressures “should support Singapore’s core inflation to rise steadily in 2022”.

MAS stated: “In particular, the resumption of private consumption in the context of the wider economic reopening next year should allow more accumulated commercial costs to be passed on to consumer prices.”

MAS’ core inflation is expected to reach the “upper limit” of the 0% to 1% forecast range in 2021, and further rise to 1% to 2% in 2022, the agency said.

CPI (Consumer Price Index)-The inflation rate for all commodities is expected to reach around 2% this year, and will average 1.5% to 2.5% next year.