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Don't delay restoring wages
After all, employers were quick to cut pay at the first sign of trouble
by Conrad Raj
Updated 10:56 AM Feb 08, 2010
NOW that the economic recovery appears to be here, shouldn't companies that embarked on a wage restraint policy and implemented wages cuts and other forms of income reduction at the onset of the global financial crisis now start restoring them?
When the world appeared to be on the path to collapse, most workers here cooperated with employers by agreeing to not only having their monthly salaries reduced, but also to having their bonuses, annual wage supplements and their perks cut.
And these cuts were implemented not only by companies making losses but even by corporation making still-healthy profits.
Well, now that things are getting better - many companies, like Keppel Corporation, have reported record profits, while Singapore Airlines (SIA) returned to profitability in its third financial quarter - isn't it time that workers get their money and perks back?
To be fair, some companies like SIA have started restoring wages and perks at least partially. But in many cases, there has been no restoration at all on the excuse that the recovery is nascent but may not be sustainable.
True, there is a lot of uncertainty in the world, as evidenced by the recent steep falls in the world's stock markets. But then, employers were quick to implement wages and other cuts at the first sign of trouble. So why is it that for them to restore these cuts, the economic recovery has to be more sustainable?
Why can't they be just as quick in restoring wages? After all, it is very easy to restore cuts should things take a turn for the worse. What some companies appear to be doing, is to pay new workers higher wages but keep the lid on wages and perks for their existing staff.
It certainly isn't fair for companies to only reward new workers and not tend to the welfare of their existing labour force. With the labour market getting tighter as the economy recovers and with the opening soon of the two integrated resorts, such policies may result in greater turnover among the older and more experienced staff to the detriment of the companies involved, as training of new staff involves not only time but monetary costs.
In Japan, the government is putting pressure on companies to raise wages to boost consumption and fight falling prices. The Democratic Party of Japan feels that falling income is feeding the country's chronic deflation.
For far too long, companies here have been able to keep wages depressed, especially at the lower income level, by being able to access foreign labour too easily. Today, foreigners account for about a third of the total work force and population.
It's good to note that the Economic Strategies Committee has suggested the introduction of some restraints like increasing the foreign worker levy. It is instead focusing on raising productivity, which has fallen sharply over the years.
While foreign talent should always be welcome, companies, however, cannot continue to depend on them as a source of cheap labour and use that as a means to depress wages all round.
It is not good for the country to see the gap between the haves and the don't-have-as-much get wider, perhaps growing into a chasm that would be too difficult in the future to bridge. This would have adverse economic and social implications that a small country like Singapore can ill afford.
And companies here, especially those that continue to be highly profitable, should not use a temporary downturn to introduce measures that lead to their workers being worse off.
After all, what has happened to the policy of building up fat in times of plenty? Wasn't the fat built up during the good years meant to even out the vagaries of leaner times? Or were they just meant to maintain dividends for the companies' shareholders?
Workers here in Singapore have, on the whole, been a cooperative lot. But employers should not take advantage of their acquiescence to wage and perk cuts when necessary.
When the going's good they should be able to just as easily share in the fruits of their labour.
After all, employers were quick to cut pay at the first sign of trouble
by Conrad Raj
Updated 10:56 AM Feb 08, 2010
NOW that the economic recovery appears to be here, shouldn't companies that embarked on a wage restraint policy and implemented wages cuts and other forms of income reduction at the onset of the global financial crisis now start restoring them?
When the world appeared to be on the path to collapse, most workers here cooperated with employers by agreeing to not only having their monthly salaries reduced, but also to having their bonuses, annual wage supplements and their perks cut.
And these cuts were implemented not only by companies making losses but even by corporation making still-healthy profits.
Well, now that things are getting better - many companies, like Keppel Corporation, have reported record profits, while Singapore Airlines (SIA) returned to profitability in its third financial quarter - isn't it time that workers get their money and perks back?
To be fair, some companies like SIA have started restoring wages and perks at least partially. But in many cases, there has been no restoration at all on the excuse that the recovery is nascent but may not be sustainable.
True, there is a lot of uncertainty in the world, as evidenced by the recent steep falls in the world's stock markets. But then, employers were quick to implement wages and other cuts at the first sign of trouble. So why is it that for them to restore these cuts, the economic recovery has to be more sustainable?
Why can't they be just as quick in restoring wages? After all, it is very easy to restore cuts should things take a turn for the worse. What some companies appear to be doing, is to pay new workers higher wages but keep the lid on wages and perks for their existing staff.
It certainly isn't fair for companies to only reward new workers and not tend to the welfare of their existing labour force. With the labour market getting tighter as the economy recovers and with the opening soon of the two integrated resorts, such policies may result in greater turnover among the older and more experienced staff to the detriment of the companies involved, as training of new staff involves not only time but monetary costs.
In Japan, the government is putting pressure on companies to raise wages to boost consumption and fight falling prices. The Democratic Party of Japan feels that falling income is feeding the country's chronic deflation.
For far too long, companies here have been able to keep wages depressed, especially at the lower income level, by being able to access foreign labour too easily. Today, foreigners account for about a third of the total work force and population.
It's good to note that the Economic Strategies Committee has suggested the introduction of some restraints like increasing the foreign worker levy. It is instead focusing on raising productivity, which has fallen sharply over the years.
While foreign talent should always be welcome, companies, however, cannot continue to depend on them as a source of cheap labour and use that as a means to depress wages all round.
It is not good for the country to see the gap between the haves and the don't-have-as-much get wider, perhaps growing into a chasm that would be too difficult in the future to bridge. This would have adverse economic and social implications that a small country like Singapore can ill afford.
And companies here, especially those that continue to be highly profitable, should not use a temporary downturn to introduce measures that lead to their workers being worse off.
After all, what has happened to the policy of building up fat in times of plenty? Wasn't the fat built up during the good years meant to even out the vagaries of leaner times? Or were they just meant to maintain dividends for the companies' shareholders?
Workers here in Singapore have, on the whole, been a cooperative lot. But employers should not take advantage of their acquiescence to wage and perk cuts when necessary.
When the going's good they should be able to just as easily share in the fruits of their labour.
