From 1972 to today: How NTUC helped shape Singapore's wages through the National Wages Council

When Singapore established the National Wages Council (NWC) in 1972, the country was undergoing rapid industrialisation.

 

Factories were expanding, jobs were being created, and a growing demand for labour was pushing wages upwards.

 

But there was a problem.

 

Wage increases were largely determined through negotiations between individual employers and trade unions. Disagreements could lead to industrial disputes, while rising labour costs threatened to undermine Singapore's competitiveness.

 

Workers wanted a fair share of the country's economic progress. Businesses needed to remain competitive, and the Government was concerned that wage increases could outpace productivity growth.

 

How could these competing interests be reconciled?

 

The answer was a national body bringing workers, employers and the Government together to agree on wage recommendations.

 

More than five decades later, the NWC remains a cornerstone of Singapore's tripartite system, guiding wage adjustments, protecting workers during economic downturns and encouraging businesses to share the gains from growth.

 

Throughout its history, NTUC and its affiliated unions have represented workers in these negotiations.

 

Their role goes beyond supporting the final recommendations. It involves making the case for better wages, protecting vulnerable workers and ensuring that the realities of working life are considered in national wage discussions.

 

How NTUC helped lay the foundations of the NWC

 

NTUC's involvement began before the council existed.

 

In 1970, the Labour Movement called for a tripartite body comprising representatives of the Government, employers and organised labour to formulate equitable wage-increase guidelines.

 

The proposal recognised that industries operated under different conditions and that wage adjustments needed to account for differences in economic performance and growth.

 

It also reflected a shift in Singapore's industrial relations, away from confrontation towards cooperation between workers and employers.

 

In June 1971, then-Finance Minister Hon Sui Sen proposed establishing a national wages council to help stabilise the labour market.

 

 NTUC officials explaining the National Wages Council's recommendations to NTUC-affiliated unions in 1972.

 

The NWC was formally established in February 1972, with Professor Lim Chong Yah as its founding chairman.

 

Its first council comprised nine members — three each from NTUC, employers' organisations and the Government — with an independent chairman overseeing discussions.

 

For the Labour Movement, the creation of the council provided a national platform for workers' interests to be considered alongside economic and business priorities.

 

Professor Lim, who chaired the council until 2001, established an important principle: the tripartite representatives should reach decisions through consensus.

 

This meant that no single group could simply impose its preferred wage recommendations on the others.

 

Employers had to consider the needs of workers. Unions had to recognise the economic challenges facing businesses. The Government had to balance both against the country's wider economic interests.

 

Agreement was not necessarily easy.

 

But the process required each party to negotiate, consider competing demands and work towards a common position.

 

That approach became a defining feature of Singapore's tripartite system.

 

From wage increases to protecting jobs: How the NWC evolved

 

The NWC's priorities have changed as Singapore's economy has developed.

 

In the 1970s, its early recommendations sought to manage wage pressures while supporting industrialisation and productivity growth.

 

As Singapore progressed, the council increasingly addressed how wages could be adjusted during economic downturns without placing jobs at unnecessary risk.

 

A major turning point came after the 1985 recession.

 

The downturn exposed the limitations of rigid wage structures. When companies experienced financial difficulties, they had less flexibility to reduce wage costs without cutting jobs.

 

In 1986, the NWC recommended the introduction of a Flexible Wage System.

 

The system sought to distinguish between stable basic wages and variable wage components that could be adjusted according to business and economic performance.

 

This gave employers greater flexibility during difficult periods while allowing workers to share in improved business performance when conditions recovered.

 

The Asian Financial Crisis in 1997 and 1998, followed by the SARS outbreak in 2003, reinforced the importance of such flexibility.

 

The council continued to encourage companies to adopt more responsive wage structures, including monthly and annual variable components.

 

These developments reflected a wider principle of tripartism: wage arrangements needed to support both workers' livelihoods and the sustainability of businesses.

 

For NTUC and its unions, the challenge was to ensure that wage flexibility did not become a one-sided arrangement in which workers bore the cost of downturns without sharing in subsequent recoveries.

 

That concern would become especially significant during the COVID-19 pandemic.

 

How 12 NTUC and union representatives help shape wage recommendations

 

Today, the Labour Movement continues to have a voice in the NWC's national wage discussions.

 

The Employee Group for the 2026/2027 NWC comprises 12 representatives, including NTUC office-holders, officials and leaders from affiliated unions.

 

They include NTUC President K. Thanaletchimi, NTUC Vice-President Abdul Samad Abdul Wahab and NTUC Assistant Secretary-General Melvin Yong.

 

Other representatives include senior NTUC officials and union leaders from sectors such as healthcare, power and gas, security, food and beverage, the built environment, telecommunications, electronics and education, as well as the public sector.

 

The breadth of representation matters because workers across Singapore's economy face different circumstances.

 

A security officer, for example, may have different wage concerns from those of an electronics worker or a teacher.

 

Their unions understand the conditions in these sectors, including wage structures, employment challenges and the pressures facing workers.

 

Through their representatives, these perspectives can be brought into national wage discussions.

 

How do the negotiations work?

 

The NWC brings together representatives from three groups: employees, employers and the Government, under an independent chairman.

 

In developing its recommendations, the council considers Singapore's economic outlook, labour market conditions, inflation, productivity and business prospects.

 

Each group contributes its perspective.

 

Employers raise issues such as operating costs, competitiveness and business sustainability. Government representatives consider broader economic and labour market priorities.

 

NTUC and union representatives bring workers' concerns to the discussion, including the need for fair wage increases, income security and additional support for those earning less.

 

The parties negotiate towards a consensus rather than leaving any single group to determine the outcome.

 

For NTUC, that means advocating wage recommendations that reflect workers' needs while recognising the conditions necessary to sustain employment and business growth.

 

The recommendations ultimately issued by the NWC are therefore the result of collective tripartite agreement.

 

But the process also provides workers with a direct channel to influence national wage policy before the guidelines are announced.

 

Protecting workers during the COVID-19 crisis

 

The COVID-19 pandemic provided one of the clearest examples of why worker representation matters in national wage negotiations.

 

As businesses faced falling revenue and an uncertain economic outlook in 2020, employers came under pressure to reduce costs.

 

Some implemented wage freezes or reductions, while others faced the prospect of retrenching workers.

 

For NTUC, a central concern was protecting lower-wage workers, who had less financial room to absorb a loss of income.

 

In March 2020, NTUC advocated wage freezes rather than wage reductions for lower-wage workers in affected companies.

 

It also pushed for additional recognition for workers who had stepped up to help their employers during the crisis.

 

The NWC's March 2020 guidelines recommended differentiated treatment for workers earning a basic monthly wage of up to $1,400.

 

Employers considering wage reductions were urged to freeze the wages of these workers instead.

 

Those implementing wage freezes or increases were encouraged to consider built-in wage increases of up to $50 for the same group.

 

When the economic situation remained difficult, the council issued supplementary guidelines in October 2020.

 

These reiterated the recommendation to protect workers earning up to $1,400 from wage cuts.

 

Employers were also advised to avoid reductions that would bring the basic monthly wages of other lower-wage workers below $1,400.

 

The NWC called on businesses to exhaust non-wage cost-saving measures and available government support before cutting pay.

 

Management should also lead by example by accepting earlier and deeper wage reductions.

 

The recommendations were collectively agreed by the tripartite partners.

 

NTUC's advocacy for special consideration for lower-wage workers helped put their needs at the centre of the negotiations.

 

The underlying principle was clear: workers with the least financial resources should not be expected to shoulder the same sacrifices as those earning considerably more.

 

Making sure workers benefit when businesses recover

 

Protecting wages during an economic crisis is one part of the challenge.

 

Another is ensuring that temporary sacrifices do not become permanent losses.

 

As Singapore's economy began recovering from the pandemic in 2021, NTUC pressed for employers to restore wage cuts and reward workers when business conditions improved.

 

The recovery was uneven. Some sectors continued to struggle, while others were experiencing stronger demand and improved business prospects.

 

NTUC therefore advocated an approach that recognised differences between companies.

 

Businesses experiencing recovery should restore earlier wage cuts and reverse other temporary cost-saving measures.

 

Where basic wages had been reduced as an exceptional measure to preserve jobs, NTUC called for these to be restored before variable wage components.

 

Companies doing well should also reward employees through variable payments and built-in wage increases.

 

The NWC's May 2021 addendum reflected these principles, calling on recovering employers to restore wages in a timely manner and companies with good prospects to reward workers fairly.

 

For workers, the recommendations reinforced an important expectation.

 

If they were asked to make sacrifices to help businesses survive a downturn, those sacrifices should be recognised when conditions improved.

 

It was also a reminder that wage flexibility should work both ways — helping employers preserve jobs during difficult periods while allowing employees to share in better business performance.

 

Pushing for stronger wage growth among lower-wage workers

 

Beyond responding to economic crises, NTUC has consistently advocated improvements in the wages of lower-income workers.

 

The NWC began issuing quantitative wage recommendations specifically for lower-wage workers in 2012.

 

These recognised that broad recommendations for wage growth might not sufficiently benefit those at the lower end of the income scale.

 

Rather than relying only on general guidance for all employees, the council provided employers with more targeted recommendations for lower-wage workers.

 

A significant development came in 2022, when the NWC raised the gross monthly wage threshold for its lower-wage recommendations from $2,000 to $2,200.

 

The change extended the scope of the recommendations to more workers.

 

For 2022/2023, the council recommended built-in wage increases of 5.5 to 7.5 per cent, with employers performing well and enjoying good prospects advised to provide increases at the higher end of the range, or at least $80 to $100, whichever was higher.

 

NTUC welcomed the increased threshold and continued to call for meaningful wage improvements, particularly for the lowest-paid workers.

 

In 2023, then-NTUC President Mary Liew urged employers to aim for larger increases for workers earning less and to channel these towards basic wages.

 

The distinction between basic wages and one-off payments also matters.

 

A bonus can provide immediate financial relief, but a higher basic wage gives workers more certainty about their regular monthly income.

 

It also provides a stronger foundation for future wage adjustments.

 

The NWC's recommendations have continued to reflect the need for sustained improvements.

 

Under the 2025/2026 guidelines, the council recommended wage increases for employees earning up to $2,700 a month.

 

Employers performing well with positive business prospects were encouraged to provide built-in increases at the higher end of 5.5 to 7.5 per cent, or at least $105 to $125, whichever was higher.

 

These developments demonstrate how the NWC's lower-wage recommendations have evolved.

 

The objective is no longer simply to encourage wage increases across the economy, but also to ensure that workers earning less receive particular attention.

 

For NTUC, this has remained a central priority: ensuring that Singapore's economic progress translates into meaningful improvements in the incomes of workers who need them most.

 

Bringing platform workers into national wage discussions

 

Singapore's workforce has changed considerably since the NWC was established in 1972.

 

Alongside conventional employees, more people now earn their livelihoods through platform-based work, including ride-hailing and delivery services.

 

Their working arrangements differ from those of employees in traditional workplaces.

 

As a result, their needs cannot always be addressed through the same wage structures and employment arrangements.

 

The 2025/2026 NWC guidelines included platform workers for the first time.

 

The move recognised the importance of extending relevant workforce development recommendations to this growing group of workers.

 

Rather than prescribing conventional wage increases for platform workers, the guidelines addressed areas such as training, technology and career planning, subject to discussions between platform operators and platform work associations.

 

NTUC welcomed the inclusion as a step towards recognising platform workers' needs.

 

Its affiliated platform work associations — the National Delivery Champions Association, National Private Hire Vehicles Association and National Taxi Association — provide channels through which these workers can raise concerns and engage platform operators.

 

Their inclusion reflects the changing nature of worker representation in Singapore.

 

As new forms of employment emerge, national discussions about wages, skills and employment prospects must also evolve.

 

From national recommendations to workplace negotiations

 

Although the NWC's recommendations are developed nationally, their impact ultimately depends on how employers and unions put them into practice.

 

The council's general wage guidelines are advisory.

 

They do not automatically guarantee every employee a pay increase, nor do they require all companies to grant identical wage adjustments.

 

Instead, they provide a common reference point for employers and unions to negotiate wages according to business performance, productivity and workers' needs.

 

This is where NTUC's affiliated unions play another important role.

 

In unionised workplaces, union representatives can use the guidelines to support negotiations with employers on wage increases and other employment terms.

 

The NWC has also encouraged employers to share relevant information with unions, including company performance, wage data and business prospects.

 

Such information helps both parties assess whether proposed wage adjustments are fair and sustainable.

 

For example, when a company reports stronger business performance, a union can refer to the guidelines when arguing that workers should receive a fair share of the gains.

 

Conversely, when an employer faces financial difficulties, the guidelines provide a basis for discussing how jobs can be protected and any necessary wage adjustments implemented responsibly.

 

NTUC Assistant Secretary-General Patrick Tay has also said that he has referred to NWC guidelines in submissions to the Industrial Arbitration Court, where the recommendations have been given weight.

 

Although the guidelines do not create automatic legal entitlements, they can serve as an important benchmark in wage disputes.

 

Beyond collective bargaining, the NWC has increasingly linked sustainable wage growth with productivity and workforce transformation.

 

Its 2025/2026 guidelines encouraged employers to invest in skills development, redesign jobs and support business transformation.

 

They also highlighted NTUC's Company Training Committees as a means for businesses and unions to work together on improving productivity and workers' prospects.

 

For NTUC, this connects wage negotiations with its wider efforts to improve workers' wages, welfare and work prospects.

 

Higher wages must be supported by the skills, productivity and opportunities that allow workers to progress over the longer term.

 

 Tripartite partners at the National Wages Council 50^th anniversary dinner in 2022.

 

More than five decades of giving workers a voice

 

Singapore's economy today bears little resemblance to the one in which the NWC was established in 1972.

 

The country has moved from labour-intensive manufacturing towards advanced industries and services.

 

Workers now face challenges ranging from rising living costs to technological disruption, changing job requirements and concerns about employment security.

 

Yet the principle behind the council remains largely unchanged.

 

Workers, employers and the Government must find common ground on how economic progress should translate into wages and livelihoods.

 

Over more than five decades, NTUC and its affiliated unions have helped shape that discussion.

 

They have represented workers during periods of rapid growth and economic uncertainty, argued for greater protection during downturns, pushed for wages to be restored as businesses recovered and advocated targeted improvements for lower-wage workers.

 

The NWC's recommendations are not the achievement of any one party.

 

They depend on cooperation and agreement among workers' representatives, employers and the Government.

 

But that agreement carries greater meaning when workers have a voice in the decisions affecting their livelihoods.

 

As the NWC prepares its 2026/2027 wage recommendations, the issues facing Singapore may differ from those of 1972.

 

The fundamental questions, however, remain familiar.

 

How should workers share in economic growth? What protection should they receive during difficult periods? And how can wages continue to improve as industries and jobs change?

 

For NTUC and its unions, these are questions that have shaped their involvement in the NWC for more than 50 years.

 

And they remain central to the Labour Movement's role in ensuring that Singapore's progress brings better wages, stronger livelihoods and greater opportunities for workers.