[SINGAPORE] The Wage Credit Scheme (WCS) runs the risk of further pushing up expenses for companies, already struggling with higher costs, without bringing about an attendant rise in productivity, said panellists at an Economic Society of Singapore forum yesterday.
Selena Ling, head of treasury research and strategy at OCBC Bank, asked whether the higher wages paid by companies tapping the government’s WCS would necessarily translate into, or stem from, an increase in productivity: “The WCS is like an alternative to minimum wage but there’s no link to productivity growth.”
Labour productivity has charted an uncertain trajectory here: last year, it fell 2.6 per cent after rising 1.3 per cent in 2011.
Ms Ling and the five other panellists were discussing the WCS, under which the government will, over the next three years, co-fund 40 per cent of wage increases for Singaporean employees earning a gross monthly wage of up to $4,000. The scheme, unveiled in the Budget this week, is aimed at nudging employers into sharing productivity gains with their workers.
Wage Credit Scheme comes under scrutiny
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