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     FrontPage Edition: Fri 19 May 2006

Government accepts NWC's wage recommendations for 2006/2007



The Government has accepted the National Wages Council (NWC)s wage recommendations for 2006/2007.
Agree with wage recommendation
The Government notes that last year, total wages increased by 4.3% as a result of our healthy economic growth. Basic wages also grew by 3.1% last year compared to 2.7% in 2004.
On the other hand, productivity growth fell from 6.9% in 2004 to 1.9% in 2005.
Consequently, the growth in real wages (both total and basic wages) outpaced productivity growth in 2005, a reversal of the trend of the preceding three years when productivity growth was higher.
The Government agrees with the NWC that our built-in wage increases should continue to lag productivity growth, so that Singapores cost competitiveness can be sustained.
The Government also accepts the NWCs recommendation that companies make greater use of variable bonuses to reward workers. Companies that are performing well should grant higher variable bonuses in recognition of workers contribution.
Support wage restructuring effort, especially in building up the MVC
The Government also agrees with the NWC that wage restructuring efforts should be sustained, especially in building up the Monthly Variable Component (MVC).
Of the three key recommendations of the Tripartite Taskforce on Wage Restructuring, the MVC has the lowest adoption rate, particularly among the SMEs (15.4%) and non-unionised establishments (17%).
It supports the NWCs call for companies to build up the MVC quickly. The Government will continue to work together with the unions and employers to press on with wage restructuring.
Welcome NWCs recommendations to help low wage and older workers
The Government welcomes NWCs call to companies to put in place wage systems and employment arrangements to facilitate the employment and reemployment of older workers. In this regard, companies are urged to make use of WDAs ADVANTAGE scheme.
The Government also supports the NWCs recommendation that in granting wage increases, companies give higher increases for low wage workers. Companies should also actively redesign jobs to enhance the productivity and earning capacity of low wage workers.
Support the stepping up of skills training and upgrading
The Government agrees with the NWCs recommendation that companies should step up training and skills upgrading, in particular for older workers, low wage workers and contract workers.
The Government will continue to give priority to skills training and upgrading of workers through WDAs programmes in collaboration with the unions and employers.
Our strong tripartite partnership among employers, unions and the Government is a competitive advantage for Singapore.
With this strong mutual trust and cooperation among the tripartite partners, the Government is confident that the NWCs recommendations will be successfully implemented by companies and unions.

Source: Press Release 17 May 2006

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