Flexi-wages passed test, says Boon Heng

The following article was published in the Straits Times on 16 January 1999.

Flexi-wages passed test, says Boon Heng
Straits Times, 16 January 1999

"If we can achieve 8 to 10 per cent from the cutting of annual bonuses, we need the balance to come from the monthly variable component. So we're talking about 3 to 6 per cent at least.' - NTUC secretary-general Lim Boon Heng, on what needs to be done to make wages even more flexible

Singapore Wages

Labour chief says system proved itself in current slump; cites report that said S'pore's competitive edge over its neighbours even increased

THE flexible wage system built up since the last recession in the mid-1980s has passed the test in the current economic downturn, Minister-without-Portfolio and labour chief Lim Boon Heng said yesterday.

He cited last year's wage figures and a Jan 6 report by Merrill Lynch Securities to show that the labour movement's confidence in the system was founded.

Some, he noted, were sceptical about trade unions' calls for employers to use the system to cut business costs.

He said a reputable financial analyst, which he did not name, told its clients that "it remained to be seen whether the much vaunted system would work".

But the unions' confidence was borne out by the results. The average negotiated annual pay rise fell from about 4 per cent at the start of last year to about 2 per cent by the third quarter.

Some unions even accepted a wage freeze to save jobs in several companies. The Merrill Lynch report to clients said wages became remarkably flexible even without recent initiatives to cut the CPF rate for employers. It added: "In the third quarter, for the first time, Unit Labour Cost (ULC) growth moderated despite the contraction in output.

"This suggested that in this downturn, the decline in wages has actually moved ahead of the fall in output.

"ULC growth slowed to 1.8 per cent year-on-year in the third quarter from 3.1 per cent year-on-year in the second quarter."

Wages were "not sticky downwards", it said, adding that there would be cost savings of S$7.5 billion a year through cuts in bonuses, foreign worker levies, and the employer's CPF rate.

"In short, thanks to the regional crisis, the competitiveness gap that Singapore enjoyed over its neighbours appears to widen dramatically."

Speaking at a ceremony where Singapore Pools donated S$250,000 to the union movement's education and training fund, Mr Lim said wages could be made more flexible with a variable monthly component built up over a period of time.

He said that wages here could be lowered without the kind of labour unrest seen elsewhere because "workers know that we have their interest at heart."

"They know that we will help retrenched workers find new jobs. They know that we spare no efforts in training or retraining workers in new skills so that they can find new jobs."

He added that workers must upgrade to narrow the skills gap with developed countries.

7 malaria cases in Mandai area

The following article was published in the Straits Times on 3 Jan 1999.

7 malaria cases in Mandai area
Straits Times, 3 January 1999

SEVEN foreign workers, working and staying in the Mandai area, have come down with malaria.

The source of the outbreak has been traced to a foreign worker who was infected in his home country, said an Environment Ministry statement yesterday.

It said that the workers had been working and staying between Lorong Asrama and Mandai Estate, an area which is mostly forested, with a few work sites, a civil defence training camp, an army camp and an old folks' home.

The cases were mild, said the ministry, and all the infected workers had already recovered and left hospital.

The statement added that ENV had taken all appropriate measures to prevent the disease from spreading to the local population. All potential mosquito breeding grounds were destroyed and the area had been fogged heavily with insecticide.

ENV officers have also been searching for unreported malaria cases, said the statement.

It added that residents in the area and others who had been to the area in the past three weeks should see a doctor immediately, if they develop a fever.