Oh No: Not negative real wage growth again?

Oh No: Not negative real wage growth again?

By Leong Sze Hian

 

I refer to the article  “Real wages declined by 0.4% in 2012” (Today, Jun 5).

0.4% negative real wage growth?

It states that “Reflecting the weaker economic conditions last year, total wages (including employer CPF contributions) in the private sector rose by 4.2 per cent, lower than the growth of 6.1 per cent registered the year before.

After adjusting for inflation using the Consumer Price Index (CPI) for all items, real total wages (including employer CPF contributions) declined by 0.4 per cent in 2012, after rising by 0.9 per cent the year before.”

Actually 0.8% negative real wage growth?

However, if you read the MOM report, it also states that “Excluding employer CPF contributions, real total wages declined by 0.8%, while real basic wages dipped by 0.1% in 2012 (really pathetic right – yet another year of negative real wage growth!).

But if you just read the news, you may be none the wiser that the negative real wage growth number that really matters (because CPF is not money that you can use!) was twice as much at – 0.8%, instead of – 0.4%.

Productivity growth not = Wage growth?

As to “Amid slower GDP growth and continued high employment creation, labour productivity contracted by 2.6% in 2012, after rising by 1.3% in 2011 and 11% in 2010, reflecting the volatility in year-to-year change in labour productivity (Chart 4). Over the decade from 2002 to 2012, labour productivity grew on average by 1.6% per annum, exceeding the growth in real total wages (including employer CPF contributions) of 1.2% per annum (Table 1).

In the immediate post-SARS years, labour productivity grew strongly on the back of robust GDP growth. However, in the last five years, labour productivity shrank by 0.4% per annum as economic growth was driven primarily by employment” – (I think 6 words – “of a lot of cheap foreign labour” – may be missing from the last sentence – maybe should read as “economic growth was driven primarily by employment of a lot of cheap foreign labour” ha ha)

Also, since labour productivity growth exceeded the growth in real total wages over the last decade – then Singaporean workers die lah! – Because we keep hearing the same song that wages can only grow with productivity growth?

In other words, if productivity grow and yet wages don’t grow – then how on earth are workers going to get reasonable wage growth?

I am just a layman – I’m no labour economist – but I don’t know about you – but I am really confused by this apparent mismatch between what we have been told all along – that productivity growth = wage growth?

3.7% wage increase rank-and-file?

The increase in the total wage change was the lowest for rank-and-file employees, at just 3.7% in 2012, compared to non-rank-and-file, junior and senior management.

0.9% negative real wage growth?

After adjusting for inflation, rank-and-file enployees had negavive real wage growth of – 0.9% – even worse off than the – 0.8% for all employees.

“Excluding employer CPF” negative real wage growth?

And since it would appear that the above figures are “including employer CPF contribution”, I shudder to imagine how much worse the “excluding employer CPF contribution” figures are.

Rank-and-file had the worse negative real wage growth?

So, despite “the National Wages Council (NWC) recommendation to give a built-in wage increase of at least $50 to low-wage employees earning basic monthly salary of up to $1,000″, rank-and-file had the lowest wage increase.

Something must be very wrong with our labour movement, when the above seems to show how poorly lower-wage Singaporeans continue to be paid.

32% employers did not raise wages?

With regard to “the proportion of private establishments that raised total wages of their employees was unchanged at 68% in 2012. However, the average quantum of wage increase in these establishments at 5.8% was lower than 6.6% in 2011″- What this means is that 32% of private establishments did not give any total pay rise to their employees last year .

So, with inflation at 4.6% last year, you better hope that you weren’t working in the about one-third of private employers who did not give any total pay rise.

Even if you were working in the other two-thirds that had a total pay rise, the average pay rise was lower than 2011.

More employers didn’t raise wages & cut more?

In respect of “The proportion of establishments that cut wages in 2012 (9.0%) was broadly comparable to 2011 (8.5%), with the quantum of wage cut at 4.4% and 4.3% respectively” – This means that more employers cut wages in 2012 than in 2011 and cut more too.

24% employers froze wages?

As to “The proportion that froze total wages was 24%, broadly unchanged from a year ago (23%) (Chart 6)”- It means that the proportion of employers who froze total wages was also higher in 2012 than 2011.

The bottom line – 1 in 10 had average pay cut, more than 2 in 10 had no pay rise and less than 7 in 10 had pay rise.

And it is likely that lower-wage employees had even lower than average pay rise, because as the above statistics show – they had the lowest increase compared to generally higher pay non-rank-and-file,  junior and senior management.

No wonder we keep hearing anecdotal stories of people getting lesser and lesser pay as the years go by.

18% employers had losses, but 31% didn’t raise or cut pay?

Since “slightly over eight in ten (82%) private establishments were profitable, unchanged from a year ago” – it makes you wonder why the proportion (31%) that didn’t increase pay, froze pay or decreased average pay seems to be so much higher than the 18% of firms that were not profitable?

So much for the desirability, effectiveness and arguably, reality of our tripartite labour environment, especially from the perspective of lower-wage workers!

20% employers didn’t pay bonus?

With regard to “One in five (20%) of establishments did not pay bonuses. These establishments gave their employees an average basic wage increase of 3.3% in 2012″ – What this means is that 1 in 5 did not pay any bonus and after adjusting for inflation of 4.6% against the increase of just 3.3%, workers may actually have had a negative real basic wage growth of – 1.3% – which is even worse than the – 0.8% for all employees.

I don’t know about you, but I never realised that so many workers don’t get a bonus. Pardon my language – but what the hell has our labour movement been doing?

14% employers paid less than 1 month bonus?

For those employers that gave a bonus – this story of misery of the poor Singaporean worker does not end – 14% paid less than 1 month!

This sad story goes on – “Nearly all industries paid lower annual variable component than in 2011″!

Only 3 in 10 gave $50 NWC recommendation?

“Almost six in ten establishments gave wage increases to their employees earning basic monthly salary of up to $1,000, including nearly three in ten which gave at least $50 built-in” – Does this mean that 3 gave at least $50, 3 gave less than $50 (below NWC recommendation) and 4 didn’t increase at all? (and haven’t even count inflation of 4.6% last year!)

Actually the chart on page 23 of the report shows that 51.6% did not give, 12.5% less than $50, 8.1% decided to give but quantum undecided and 27.7% gave at least $50!

Bottom line – only 3 in 10 gave at least $50. This starkly sobbing statistic has to be seen in what I reluctantly describe as crocodile tears when  it was reported in the media that while eight in 10 companies in the unionised sector accepted the recommendations and boosted the pay of their low-wage workers by at least $50 last year, but only three in 10 non-unionised companies followed suit (Now that the MOM report is out just a few days later – we know that 8 in 1o unionised and 3 in 10 non-unionised (implying unionised is so much better?) – actually means in totality only 3 in 10 of less than $1,000 workers got the $50!).

NTUC “Very concerned”?

Employer group the Singapore National Federation of Employers had said that the progress was a “good start”, but the National Trades Union Congress said that it was “very concerned” with the slow pace”. The NTUC’s almost annual protestations of concern and “wanting” to make progress, do not appear to pan out in the wage statistics.

I think we need urgent action and statistical benchmark targets to uplift low-wage workers’ pay and reduce their numbers, instead of rhetoric year after year (kind of like NATO – No Action Talk Only).

Pardon my languange again, but what the ____ is the labour movement doing? Can you imagine working for less than $1,000 a month! Note: For a more comprehensive commentary of the latest protestations of how concerned the labour movement is about last year’s NWC recommendation- read “NWC: Oh no, not again?”.