Friday, July 06, 2018

Guidelines on wages and working conditions

Some people still hold to the idea that wages and working conditions should be negotiated between the employer and individual employee.

This has been the practiced in Singapore and most countries around the world.

What is the outcome of this practice?

Wages are suppressed, often below the living wage. Many workers have to do two jobs to earn enough to raise a family.

Most families need two people to be working to earn enough.

This is harmful to the society, to families and to the future generations.

Why is this so?

The individual employees have weak bargaining power. They also have inadequate information about what is a fair wage for the job.

The problem is exaberated when the government allows a relatively free inflow of foreign workers who are willing to work for low wages, due to the poverty in their countries.

Many countries impose a minimum wage. This is a good approach. (Sadly, Singapore still does not have this prctice).

But a minimum wage is just the starting point. Surely, there are occupations which require skills and experience, and should pay above the minimum wage?

It is relatively easy for the government to provide the guideline on a "fair wage" for each occupation. They have data on the earnings of people in each category of job. They also have data of salaries based on contribution to the Central Provident Fund.

If the government analyze the data, they can provide guidelines on the wage for each category of job.

This information can be published as a guideline for employers and individual workers. The two parties can still negotiate for the actual wage, but they are guided by the guidelines.

Under this system, there is no need to have trade unions to carry out collective bargaining for the wages and to resort to costly and harmful worker strikes to settle the issue.

The guidelines can also cover the other terms of employment.

Trade unions still have a role to help their members to deal with individual disputes on their working conditions or perceived harassment in the workplace.

We need a new framework for wages and working conditions to promote the welfare of workers and businesses.

Tan Kin Lian

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