The National Wages Council (NWC) has today released its recommendations for wages for the period 1 July 2012 to 30 June 2013.

The NWC took note of the healthy growth of the economy and the low levels of unemployment.  At the same time, it also noted the level of inflation and slower rate of growth of labor productivity.  Further, the NWC has recognized that business outlook in the next year continues to be unpredictable, and that many business may face cost and inflationary pressures.

Overall, the NWC has reiterated that the key to sustainable growth is for real wages to rise in line with increases in productivity over the long term.

To this end, the NWC has recommended that companies adopt a 2-tier wage increment policy, incorporating both built-in wage increases as well as variable wage increases that are dependent on the profitability of individual companies.  Specifically, it has recommended that workers earning less than $1,000 per month recieve at least $50 built-in wage increase, on top of variable wage increases.  This initiative will give lower wage workers a higher proportionate pay increase, and help these workers cope with higher costs of living.

Read the full report here.