Joint Press Statement by the Singapore Business Federation (SBF) and the Singapore National Employers Federation (SNEF) on the NWC 2004/5 Guidelines
Strong Support
The Singapore Business Federation and the Singapore National Employers Federation strongly endorse the NWC 2004/5 Wage Guidelines.
Improved cost competitiveness
Since 1998, the economy has grown at an average of 2.7% per annum, compared to the average growth rate of 11.5% per annum in the preceding 6 years from 1992 to 1997. The slower growth dragged down productivity growth and moderated wage adjustments.
From 1992 to 1997, productivity grew 4.7% per annum while real wages grew 5.7% per annum. From 1998 to 2003 productivity grew 1.6% per annum compared to real wages, which grew 2.4% per annum.*
However real wage growth lagged productivity growth in 2002 by 1.4 percentage points and in 2003 by 1.6 percentage points.
This has helped to improve Singapore's cost competitiveness. Furthermore overall wages during 98-03 were also reduced because of cuts in the employer CPF contribution rates.
However, the slower wage growth during the last 6 years could not completely close the gap built up earlier between wages and productivity. Hence, employers support a moderate wage increase, which lags behind productivity increase. As the economy recovers, a moderate built in wage increase will buttress our wage cost competitiveness vis a vis productivity.
Wage restructuring must continue
The economic recovery also offers the best opportunity for companies to restructure their wage systems and to put in place the competitive base-wage system and the flexible wage system. With wage increases, companies would also be in a better position to implement the monthly variable component. They should be able to achieve the 10% MVC target in 2-3 years.
Wage restructuring is crucial to sustain the cost competitiveness of companies and employers must take advantage of the economic recovery to complete their wage restructuring.
Portable medical benefits and training
We should also not lose sight of the need to put in place portable medical benefits as a long-term solution to curb rising medical benefit costs and to promote the employability of older workers. With recovery employers and workers must remain committed to retraining to upgrade skills in order to raise productivity to sustain wage increases.
Click here to download the NWC 2004/5 guidelines Click here to view the presentation slides by SNEF and SBF on the NWC 2004/5 guidelines
