With the current economic crisis, businesses have become more cautious in hiring and expenditure. Hence it comes as no surprise that 2008 has seen a smaller wage increase amongst the workforce in the private sector, as compared to the year before.

The 2008 wage report released by the Ministry of Manpower (MOM) highlights that within the private sector, total wages (which includes bonuses) increased by merely 4.2%, compared to 5.9% in 2007; while bonuses dropped to an average of 2.31 months, compared to 2.36 months in 2007.

After taking into account the rise in Consumer Price Index by 6.5% in 2008, real wages actually decreased by 2.3% – a stark contrast to the increase of 3.8% the year before.

Amongst the three categories of employees, rank-and-file employees experienced the steepest decline in wage increase (5.4% to 3.2%), followed by senior employees (6.1% to 4.8%), and junior management (6.9% to 5.8%).

Visit MOM for more details on the 2008 wage report.

Yesterday, the National Wages Council (NWC) announced that its 2009/2010 wage and wage-related guidelines for employers, unions and the government will remain the same as those announced ahead of schedule in January 2009.

The guidelines, which cover the period from 1 July 2009 to 30 June 2010, continue to recommend wage freezes or cuts, as well as the following additional measures:

Cutting labour costs
The NWC endorses the Tripartite Guidelines on Managing Excess Manpower (MEM), which recommend “shorter work week, temporary layoffs, no pay leave, and other work arrangements as alternatives to retrenchments”.

Wage flexibility
The NWC encourages employers to adopt more flexible wages by enlarging the Monthly Variable Component (MVC). It also endorses the MEM guidelines’ recommendation to cut up to 10% of an employee’s basic wage by converting it into MVC.

Government downturn initiatives
The NWC urges employers to fully utilise Jobs Credit, Workfare Income Supplement (WIS), and the Skills Programme for Upgrading and Resilience (SPUR), all of which are funded by the $20.5 billion Resilience Package.

Bosses, if you're looking to trim operating costs, forget about reducing your CPF contributions to employees.

There are other methods to employ to keep your company in the black, according to Minister Lim Boon Heng: "Bonuses can be cut. The MVC can also be cut if needed. Other measures include a shorter work-week with corresponding reductions in wages."

Perfectly fine measures, it seems, especially when we've all established that employees would rather lose digits from the paycheck than lose our jobs. And of course we should all be thankful for it.

"This is our advantage," he adds, knowing of no other countries with "such a range of options open to employers."

You often hear people complaining about the price of everything going up, despite their salaries remaining the same.

Well, guess what? Thanks to inflation, real earnings for many workers are actually falling. Even more than before. (Real earnings refer to your pay minus the effect of inflation)

According to a report on employment in the second quarter of 2008 by the Ministry of Manpower (MOM), real wages have shrunk by 4% on average, as compared to the same period last year.

Weaker wage increases in the second quarter has led to workers in more sectors seeing their real wages shrink.

For instance, real wages fell by 2.1% and 2.3% for Financial services and Manufacturing respectively, while Services and Hotels & restaurants saw bigger dips of 4.6% and 5.1%.

It seems strange that people are still unemployed considering the number of job ads online and in print. More so when employment growth has been consistently reported at being strong with a record 144,600 jobs created in the first half of the 2008.

Yet, the latest labour market statistics from the Ministry of Manpower show that 77,800 residents remained jobless, an increase of 12%. This makes three out of every 100 workers a jobless one.

The grim news doesn’t get any better. Productivity continues to shrink for the third quarter in a row, while real earnings have shrunk thanks to inflation, despite paychecks growing by 3.1%.

Perhaps the only bright spots amidst the gloom are a surge in the construction industry and a dip in the number of retrenched workers.

No reason to loosen up belts though. Methinks the worst is yet to come.