NTUC: Wages need to account for standard of living?

I refer to the article “Foreigners in labour force” (Straits Times, Dec 20).

NTUC helping cleaners to earn more?

It states that “The National Trades Union Congress ( NTUC) has set a target to raise 10,000 cleaners’ monthly salary to at least $1,000 by 2015. There are about 69,000 cleaners in total here.

The median gross wage for cleaners and labourers had fallen from $1,277 in 2000 to $1,020 last year. This means half of the workers earned less than $1,020 last year.”

In this connection, I would also like to refer to the article “Labour movement ‘uncomfortable’ with call for equal pay for migrant workers” (Today, Dec 14).

NTUC: Wages need to account for standard of living?

It states that “Explaining the NTUC’s standpoint after meetings with the business community, Mr Lim said that equal remuneration would not take into account the standard of living in Singapore as opposed to other regions, and this would be unfair for local workers who have to support their family members here.”

Since the NTUC is now saying that we need to “take into account the standard of living in Singapore” as “local workers (who) have to support their family members here”, then the obvious question that may come to mind is what is a fair wage in Singapore?

Practically everyday in the media, you see something on the continuing debate about the need to pay low-income Singapore workers more.

But, how much more?

What is a fair wage for workers?

First and foremost, I think when we talk and about a fair wage, it should be the basic wage and not the gross wage which includes overtime, whereby the normal working week, may be 12 hours a day for 6 days a week.

Underpaid by more than 100%?

Professor Lim Chong Yah has talked along the lines that too many low-income Singapore workers are being “underpaid by much more than 100% of their pay when compared with their counterparts in countries with comparable national affluence like Hong Kong, Japan or Australia”, and that we need a “wage shock therapy”. (“Singapore Wage Debate Heats Up“, The Wall Street Journal, Apr 17)

He also suggested “raising pay for workers drawing monthly wages below S$1,500 by 50% or more over a period of three years”.

$50 raise also object?

For a start he suggested that those earning $1,000 or below be given an immediate $50 raise per month. So, if under $1,000 is grossly underpaid, then perhaps around $1,500 may be a good starting point for a fair wage.

However, the response generally from the union movement, employers’ federation and the Government was that even this meager $50 increase for all low-income workers was not very favourable.

Must have productivity gains?

The consistent rhetoric was and still is that wages can only go up with productivity gains, despite Singapore’s poor productivity growth being a clear indictment that our productivity enhancement initiatives and programmes have not and are still not working.

Financial assistance criteria?

In my view, a good starting point in trying to determine what is a fair wage, maybe to look at the income criteria used to grant financial assistance.

HDB flat rental criteria?

For example, the HDB requires a household monthly income of $1,500 or less to qualify to apply for a rental flat.

So arguably, anything less than $1,500 may not a fair wage.

Poverty level criteria?

I understand that most developed countries would look at their poverty level in the debate on what would be considered a fair wage.

ComCare criteria?

In this regard, in Singapore, I understand that the general benchmark used to approve financial assistance applications is around $550 per capita income or $1,700 household income.

According to a Ministry of Community Development, Youth and Sports’ (MCYS) study, only 20,300 families, or about one in 10 of the 200,000 families in the bottom fifth of the income ladder, were getting help under the various ComCare schemes.

Even if the bulk of those getting assistance were in the poorest 10 per cent of households – about 100,000 which earned a household income of only S$1,400 a month, it still means that only about two of these 10 poorest households were helped. (“Focus on help for families that need it“, Nov 22, 2011)

Workfare criteria?

Workfare uses the criteria of $1,700 and below for Singaporeans age 35 and above. Workfare helps about 400,000 Singaporean workers. (“Budget 2011: 400,000 to receive Workfare special bonus“, Feb 18, 2011)

So, does this mean that there are 400,000 low-income Singaporeans age 35 and above?

NTUC assistance criteria?

NTUC uses gross household income of $2,800 and $725 per capita income or $1,400 gross personal income for those without dependents, to give financial assistance to union members.

So, perhaps with an average of about 3.5 persons per household in Singapore, would $1,500 be a good starting point as to what is a fair wage?

Living Wage?

Another concept used in many countries, is the living wage or subsistence wage, which is the minimum income necessary for a worker to meet basic needs. These needs include shelter (housing) and other incidentals such as clothing and nutrition. In some nations such as the United Kingdom and Switzerland, this standard generally means that a person working forty hours a week, with no additional income, should be able to afford a specified quality or quantity of housing, food, utilities, transport, health care, and recreation. (Source: Wikipedia)

How many workers not getting a fair wage?

With about 110,000 full-time workers earning less than $1,000, and about 400,000 full and part-time workers earning $1,200 and below, the total number of full and part-time workers earning not more than $1,500 may be over half a million.

According to the Department of Statistics’ Yearbook of Statistics 2012, ACTIVE CENTRAL PROVIDENT FUND MEMBERS BY WAGE LEVEL in 2011, there were 458,600 workers earning less than $1,500 a month. If we include those who for various reasons may not be active CPF members because they did not make a contribution in the last three months, such as the unemployed, self-employed who did not make CPF Medisave contributions, those under-going training, etc, the total number of workers earning below $1,500 may be more than 500,000.

According to the Report on the Labour Force 2011, as of June, 2011, there were 697,200 earning less than $2,000 of which 464,000 earned less than $1,500 and 236,300 earned less than $1,000. There were 306,800 full-time workers and 157,300 part-time workers earning less than $1,500, 110,400 full-time workers and 126,000 part-time workers earning less than $1,000, 299,800 self-employed persons, and 36.2 per cent of employed residents worked more than 48 hours a week.

Looking at the above statistics, we may have a long way to go before most Singaporeans may get a fair basic wage.

In this connection, we need to rethink and question the recent initiatives to help Singaporeans to get jobs, which were in low-pay jobs like Senior Care Associates at $1,200 and security guards at about $4 a hour. (“Can’t find Singaporeans to work?“, Dec 10)

We need programmes to help Singaporeans get jobs that at least pay a fair basic wage.


Leong Sze Hian


About the Author

Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.