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http://tnp.sg/news/story/0,4136,204055,00.html?
National Wages Council announces guidelines, but warns...
We need to be cautious
By Lediati Tan
June 05, 2009
STOCK markets are up, property market sentiments are improving, and even factory outputs have increased last month for the first time since August last year.
Some analysts are even talking about 'green shoots' appearing in certain sectors of the economy.
But the National Wages Council (NWC) is urging caution.
When announcing its wage guidelines for this and next year yesterday, it warned of a prolonged downturn and urged employers, unions and the Government to press on with the concerted actions it recommended in January to cut costs, save jobs and enhance competitiveness. (See report below.)
Its guidelines were accepted by the Government, the National Trades Union Congress (NTUC) and the Singapore National Employers Federation.
All three agreed with the need for a cautious approach given the uncertain economic outlook.
In a statement sent shortly after the NWC announced its recommendations, the Government said: 'In view of continuing risk of a severe and extended downturn, the Government agrees with the NWC's recommendation that companies persist with the focus on cutting costs to save jobs.'
NTUC deputy secretary-general Heng Chee How also agreed that a cautious approach should be adopted as 'no one can say for sure that the economic downturn has bottomed out, much less that the recovery has begun'.
So, should we be optimistic or should we heed the NWC's advice?
Both Nanyang Technological University economist Choy Keen Meng and CIMB-GK economist Song Seng Wun felt that there is no contradiction between the two positions.
While the worst is over for the general economy, said Dr Choy, the labour market has not met its bottom.
Labour market
He said: 'The labour market does not react as quickly as companies take three to six months to react to changes in the market.'
Dr Choy predicts that the labour market will worsen a bit more but the extent of deterioration will be contained.
Mr Song noted that even though businesses are not cancelling orders as before, they are also not in a hurry to hire.
Things are a bit better in terms of business sentiments and consumer confidence, he said, but it is premature to say that we are on the road to sustainable recovery until businesses start hiring.
Said Mr Song: 'The domestic repercussion of global recession may still linger on for much longer. We don't know what the lag effect of the global recession will be.
'From the Government's standpoint, it's still too early to declare that the war is over unless we see more jobs being created than lost.'
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NWC recommendations
Companies/employers
Those affected by economic downturn: Wage freezes or wage cuts - in consultation with their unions/workers.
Those with excess manpower: Don't retrench, introduce measures such as shorter work week, temporary layoffs and no-pay leave.
Companies' management has to lead by example for cost-cutting measures.
Those doing well: Reward workers with moderate wage increases through variable payment.
Wage flexibility: Make use of the Monthly Variable Component (MVC)
Reduce non-wage costs and improve productivity.
Prepare for upturn: Make use of government initiatives such as Skills Programme for Upgrading and Resilience (Spur) to upgrade skills of workforce to increase competitiveness.
Unions/workers
Be flexible, learn new skills and upgrade current skills. Make use of Workfare Income Supplement (WIS) and Spur.
Those retrenched or unemployed: Change expectations and be prepared to make career switches.
Don't forget long-term initiatives
Employ and improve employability of older workers.
Bring women back to workforce
Help low wage, contract and informal workers.
National Wages Council announces guidelines, but warns...
We need to be cautious
By Lediati Tan
June 05, 2009
STOCK markets are up, property market sentiments are improving, and even factory outputs have increased last month for the first time since August last year.
Some analysts are even talking about 'green shoots' appearing in certain sectors of the economy.
But the National Wages Council (NWC) is urging caution.
When announcing its wage guidelines for this and next year yesterday, it warned of a prolonged downturn and urged employers, unions and the Government to press on with the concerted actions it recommended in January to cut costs, save jobs and enhance competitiveness. (See report below.)
Its guidelines were accepted by the Government, the National Trades Union Congress (NTUC) and the Singapore National Employers Federation.
All three agreed with the need for a cautious approach given the uncertain economic outlook.
In a statement sent shortly after the NWC announced its recommendations, the Government said: 'In view of continuing risk of a severe and extended downturn, the Government agrees with the NWC's recommendation that companies persist with the focus on cutting costs to save jobs.'
NTUC deputy secretary-general Heng Chee How also agreed that a cautious approach should be adopted as 'no one can say for sure that the economic downturn has bottomed out, much less that the recovery has begun'.
So, should we be optimistic or should we heed the NWC's advice?
Both Nanyang Technological University economist Choy Keen Meng and CIMB-GK economist Song Seng Wun felt that there is no contradiction between the two positions.
While the worst is over for the general economy, said Dr Choy, the labour market has not met its bottom.
Labour market
He said: 'The labour market does not react as quickly as companies take three to six months to react to changes in the market.'
Dr Choy predicts that the labour market will worsen a bit more but the extent of deterioration will be contained.
Mr Song noted that even though businesses are not cancelling orders as before, they are also not in a hurry to hire.
Things are a bit better in terms of business sentiments and consumer confidence, he said, but it is premature to say that we are on the road to sustainable recovery until businesses start hiring.
Said Mr Song: 'The domestic repercussion of global recession may still linger on for much longer. We don't know what the lag effect of the global recession will be.
'From the Government's standpoint, it's still too early to declare that the war is over unless we see more jobs being created than lost.'
--------------------------------------------------------------------------------
NWC recommendations
Companies/employers
Those affected by economic downturn: Wage freezes or wage cuts - in consultation with their unions/workers.
Those with excess manpower: Don't retrench, introduce measures such as shorter work week, temporary layoffs and no-pay leave.
Companies' management has to lead by example for cost-cutting measures.
Those doing well: Reward workers with moderate wage increases through variable payment.
Wage flexibility: Make use of the Monthly Variable Component (MVC)
Reduce non-wage costs and improve productivity.
Prepare for upturn: Make use of government initiatives such as Skills Programme for Upgrading and Resilience (Spur) to upgrade skills of workforce to increase competitiveness.
Unions/workers
Be flexible, learn new skills and upgrade current skills. Make use of Workfare Income Supplement (WIS) and Spur.
Those retrenched or unemployed: Change expectations and be prepared to make career switches.
Don't forget long-term initiatives
Employ and improve employability of older workers.
Bring women back to workforce
Help low wage, contract and informal workers.
