Wage Credit Scheme – a sure work remedy?

The Wage Credit Scheme (WCS) is to spur companies to raise productivity, and in turn, lift the incomes of Singaporeans while the foreign worker tap is being tightened further.

The WCS sounds nice. But I believe there are some concerns.

Will companies think that the WCS will be a permanent scheme, whereby the government will extend it after 3 years? Afterall, the Workfare Income Supplement (WIS) scheme is now sort of a permanent scheme. If companies have that hope or mindset that the state will extend the WCS, then will they be still actively seeking ways to raise productivity? Or will they simply view it as a convenient wage subsidies to retain Singaporean workers – during this period of tightened foreign workers inflow? The worst case is that companies which tap on WCS, but do not raise productivity after the 3 years period. Then will the scheme lose its main purpose? And how will companies reconcile the fact that its workers are now paid higher without corresponding increases in productivity. Will this problem in itself prompt the state to further entrench the WCS after its initial 3 years?

WCS seems to be the type of policies whereby the state provides incentive for companies to raise productivity. This is because, companies will probably have to match the higher wage payouts for higher productivity levels – if not the pay rise serve no purpose other than increasing the costs of the companies. The issue raised by some people is that, will companies know how and what are the ways to increase productivity? – making workers work longer hours is not the best or only way. Can the government come up with sort of a five year plan, whereby government officials are sent to companies to discuss with individual companies the best way forward to raise productivity, and guide them through the process? After all, all companies have different needs and challenges, and not all employers know how to proceed to raise productivity levels.

Some companies may be keen to tap on the WCS to raise the pay for their workers, especially since the government is chipping in. And if they do not know the best way forward to raise productivity, and depend on longer working hours for employees, will the productivity levels decrease instead? A stressful workforce (working longer hours with a heavier workload) will not help in boosting workers’ morale and would eventually affect the efficiency of the companies’ operations.

Taking another look at how to raise productivity may be good. Raising productivity certainly does not mean just making workers work for longer hours, and at the same time work harder. And we should not also restrict ourselves to linking productivity with enhancements in technological developments within the companies. Probably, we can also take a look or place more emphasis on the way workers work. Specialization of skills within individual workers is good, but may not longer not be the best way forward. On top of that, some forms of multi-tasking may enhance the resilience of the workforce – especially in a tight labour environment Singapore faces.

Raising productivity is not easy, and so too is defining productivity. We should have an open mind, and not restrict ourselves to a certain narrow mind frame of what constitutes raising productivity. What we want are methods and ways that allow companies to work more efficiently and sustainably.

And people certainly do not wish to see the entrenchment of policies that help companies restructure and work towards raising productivity – because it simply raises the question of how effective these policies are in the first place.

Restructuring is very much needed, and people too do not want to see companies taking the easy way out in the face of such policies which are set up to aid them in the first place.


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