Singapore endorses wage cuts for SARS-hit industries

Singapore endorses wage cuts for SARS-hit industries

Agence France-Presse
Singapore

The Singaporean government endorsed on Thursday
recommendations by the National Wages Council (NWC) for companies
hit hard by the SARS fallout to cut salaries in order to save
jobs and survive the crisis.

"The difficult situation of today and the uncertainty of what
lies ahead calls for the implementation of painful measures,"
such as wage freezes and cuts, the ministry of manpower said in a
statement.

It said the implementation of the measures to cut, freeze or
adjust wages from July this year to June 2004 "will go a long way
in helping companies stay afloat and workers keep their jobs."

The government agreed with the NWC "that our immediate task is
to help businesses remain viable and minimize job losses," the
ministry said.

On Wednesday, the NWC for the first time in its history
recommended wage cuts by companies directly hurt by the fallout
of the Severe Acute Respiratory Syndrome (SARS) outbreak, which
has killed 29 out of 206 infections here.

The council -- which includes unions and employers -- left the
rate of the reductions to the companies concerned.

Companies not directly affected by SARS but are also suffering
from the impact of the difficult economic conditions were advised
to continue to freeze wages.

Other firms were urged to restructure their wage systems to
include a monthly variable component.

The manpower ministry said the hardest hit sectors in
Singapore are the tourism and transport-related industries.
Visitor arrivals fell 15 percent in March when the outbreak
initially kicked in and by a whopping 67 percent in April.

"Air transport, hotels, retail sales, travel agents and taxis
have reported sharp declines in their businesses," it said.

It warned that the impact of SARS on the crucial manufacturing
sector, which has so far been relatively less, could escalate if
the epidemic is not contained, leading to more job layoffs.

Unemployment rate for this year could go beyond 5.5 percent,
it said.