Singapore's National Wages Council, the body responsible for developing guidelines on wages and wage-related matters in the city-state, will convene, unusually, for a second time this year, according to Manpower Minister Josephine Teo. The council, which comprises representatives from employers, trade unions, and the government, is only convened to issue guidelines once annually, and had already done so in March this year.

"However, significant economic headwinds and uncertainty remain. Many employers will continue to see weak demand, and face pressure to retrench workers," Teo wrote in a Facebook post on August 3 after meeting with National Trades Union Congress secretary-general Ng Chee Meng and Singapore National Employers Federation president Robert Yap. "It is therefore timely for NWC to update the tripartite position on wages and other issues of concern to workers and employers."

The council's earlier recommendations had stated that wages should be reduced only after non-wage costs had been trimmed and wage costs had been offset with government support. Furthermore, wage reductions should be implemented on a graduated basis, so that higher-wage employees cushion some of the impact for their lower-wage counterparts—which most companies in the city-state have faithfully followed, with some executives taking pay cuts of up to 50 percent. Retrenchments should be a last resort.

However, unemployment and retrenchment have continued to rise, and pay cuts are very common today. The minister also pointed out in her post that based on company notifications to the Ministry of Manpower, some 3,600 employers had implemented wage reductions since then, affecting approximately 150,000 workers. This number may be an optimistic estimate, as companies only need to notify the ministry if they are implementing wage reductions of more than 25 percent gross monthly salary for Singapore citizens or more than 25 percent basic monthly salary for non-citizens.

Photo: Josephine Teo