What’s going on in the NWC?

I think the NTUC is trying very hard to say it is trying very hard to make things better for low wage workers, without quite saying it so plainly. I am just reading news reports on what NTUC chief Lim Swee Say said about the National Wages Council guidelines which called on employers to give workers earning less than $1,000 a month a $60 pay rise.

There seems to be some sort of wrangling on the issue within the NWC, a tripartite body of unionists, employers and the G.

The bone of contention: The unions wanted the $1,000 a month threshold raised to either $1,100 or $1,200. But employers said no. So it was stuck at $1,000 a month, as it has been for the past two years. In fact, unionists say that employers did not even want the minimum sum of $60 specified, but I suppose the unionists got their way.

You know, NWC is supposed to work by “tripartite consensus’’, going by what its own website says. But it seems one arm is unhappy enough to disclose some of these closed-door details of negotiations. ST said that the employers’ federation was asked for a response but none was forthcoming. I can think of many responses – and I don’t have to be an employer to trot out them: Like how manpower costs have gone up because of the squeeze on foreign manpower; productivity while up, is still in negative territory, other costs of doing business, such as utilities and rent, have gone up and the economy is still not powering ahead fast enough.

The original NWC press statement highlighted this line: real wage increases should be in line with productivity growth over the long term. In fact, one of the guiding principles of NWC is that real wages (after taking into account inflation)  must lag behind productivity growth.

I had a look at the chart which NWC provided on changes to labour productivity and real wages. Last year’s productivity change was minus 0.2, while real basic wages rose by 2.9 . In 2012, labour productivity change was minus 1.4, while real wages was minus 0.1.

Is that what employers are griping about? That the NWC shouldn’t be  going against its guiding principle? That real wages are already out-stripping productivity growth? Or am I interpreting the numbers wrongly? If so, I hope to be corrected. I wish employers would speak up more on the link between the NWC guidelines on wages and current productivity levels. It would make for more meaningful discussion.

 Of course employers are in a bind. To say no to $60 looks churlish, especially if it’s for those earning $1,000 a month or less. Some people are arguing that for this group of workers, it is not a question of wages lagging behind productivity, but that wages need to be levelled up after years of stagnation thanks to abundant foreign labour. Maybe we should look at productivity levels of this group of workers as well? Frankly, I am a bit concerned too, because the Progressive Wage Model for low wage workers doesn’t seem to take into account rise in productivity, unless we assume that the training which the cleaners and security guards must go through definitely translates into higher  productivity.     

Now the funny thing is this: There will now be another tripartite committee to advise the main tripartite committee. But apparently this is only on the issue of low wage workers. Then there is some kind of bone thrown in about this taskforce’s role in spreading the productivity mindset.

I am really reading between the lines here and I am not sure I’m reading right. I wish the NWC, NTUC and Singapore National Employers Federation would really tell us what the problem during negotiations was all about.