share on
Speaking in Parliament, Senior Minister of State for Manpower Zaqy Mohamad affirmed that for wages to continue increasing, workers and businesses must become more productive.
Singapore's Senior Minister of State for Manpower Zaqy Mohamad has reasserted the importance of ensuring lower-wage workers receive meaningful wages.
Speaking in Parliament and addressing queries on progressive wages and the revaluing of such workers, he stated: "Indeed, our lower-wage workers perform essential jobs and should be recognised for their contributions. They form the backbone of our economy, and provide many important services that we should not take for granted."
Setting the context, he explained that a decade ago, tripartite partners recognised that wages in some jobs were stagnating; particularly in outsourced sectors such as cleaning, security and landscape. At the same time, workers found themselves entrenched in the same job with little opportunity for skills upgrading and progression.
In response, the National Trades Union Congress (NTUC) conceptualised the Progressive Wage Model (PWM) to better outline better wage, skills and career pathways. Tripartite partners implemented the first mandatory PWM in 2014 in the cleaning sector, followed by landscape and security in 2016.
Since then, Singapore has seen notable results; real cumulative wage growth of locals in these PWMs grew by 31% from 2014 to 2019, outpacing wage growth of the 20th percentile worker at 23%. This success led to further expansion of PWMs to the lift and escalator maintenance sector in 2019.
SMS Zaqy also shared on the challenges he faced when he chaired the Tripartite Workgroup on Lower-Wage Workers (TWG-LWW) in 2020.
First, the lowest-paying jobs were primarily observed in domestic sectors, such as kopitiams, heartland retail, cleaning, security. This presented the dilemma of figuring out how to significantly uplift lower-wage workers while also convincing consumers and businesses to accept higher costs.
The second challenge lay in raising the coverage of Progressive Wages – from only 10% of low wage workers in early days of the first few PWMs – and making wage increases meaningful to narrow the gap between the bottom 20 percent and the median worker.
To address these challenges, the Singapore Government accepted the Tripartite Workgroup’s recommendation to expand PWM to more sectors, such as food services and retail, and occupations including administrators and drivers.
"And back then if you recall, we were in the midst of COVID-19. Despite COVID-19 and business uncertainties, tripartism prevailed and delivered significant boosts in PWM wages."
Citing an example, SMS Zaqy shared that the basic wage requirement for entry-level cleaners will increase from S$1,312 in 2022 to S$2,420 in 2028. Similarly, the security sector is also projected to grow even more. Today, cecurity PWM wage requirements are minimally S$2,650 – higher than the 20th percentile wage level. By 2028, entry-level security officers will earn at least $3,530 – a 56% increase from 2022.
According to SMS Zaqy, such significant wage increases are possible for the security sector, largely due to its high potential for productivity gains – through deployment of digital technologies, more efficient work processes, and robust skills certification framework to guide officers in improving their productivity.
At the same time, there is still more effort to be done in improving the work environment and reducing reliance on work hours.
On top of PWMs, employers in Singapore are also required to pay all local employees at least the Local Qualifying Salary (LQS) to qualify for foreign work passes, and implemented the Progressive Wage Mark accreditation scheme to encourage consumers to support employers who are paying progressive wages.
Collectively, these measures benefit up to nine in 10 local full-time lower-wage workers today, an improvement from the one in 10, prior to 2021.
Boosting the value-add of lower-wage jobs
In his speech, SMS Zaqy agreed that for wages to continue increase, workers and businesses must become more productive.
"This is why the PWM is not just about raising wages, but also raising the value-add of the jobs. Tripartite partners regularly review the skills ladders, while workers are required to go for training and encouraged to take on higher-value roles."
SMS Zaqy also highlighted the important role businesses have in transforming business models, improving operations and redesigning jobs, encouraging them to take reference from the respective Industry Transformation Maps to do so.
The Government has also provided employers substantial transitional support through the Progressive Wage Credit Scheme, which partially offsets employers’ costs of paying lower-wage workers better wages. Around $1bn was disbursed to 70,000 employers, resulting in wage increases for over 345,000 employees in 2022.
"Employers must take advantage of this transitional support by accelerating business transformation, such as adopting technology and refining processes to improve productivity. And the security sector has shown that it can be done."
Shaping perceptions of lower-wage jobs
SMS Zaqy also agreed that the success of PWM rests partly on public recognition of the importance of PWM jobs, and requires society's support for workers' fair remuneration.
"When I speak to our lower-wage workers, across sectors, it is clear they want their work to be recognised by society. They prefer the dignity of earning a fair salary, over receiving handouts any day.
"This is fundamental to our social compact in Singapore. In this regard, Tripartite partners agree with the Member that service buyers and consumers play important roles."
In this regard, tripartite partners have carried out efforts to promote good industry practices among service buyers, such as outcome-based contracting, to specify clear deliverables in a contract rather than the number of workers. This enables service providers to redesign work processes holistically, to deliver quality outcomes with lower labour intensity, enabling employers to pay higher wages.
"It is also important for consumers to treat fellow Singaporeans with respect, and recognise that paying a little more for goods and services goes a long way towards rewarding their efforts and improves the livelihoods of our lower-wage workers."
Future of PWM
In looking to the future of the PMWs, SMS Zaqy agreed on the importance of regularly taking stock and making adjustments. This spurred the the Tripartite Workgroup in 2020.
"Currently, there is some flexibility in the PWM for market forces to play a role. In jobs where the skills levels are higher and wages have risen to an appropriate level, we recognise that their wages could then be decided by market forces."
He cited the retail and food services sectors as an example, where jobs such as retail managers and senior cooks are part of the PWM job ladder, but their wages are not mandated by PWM.
"Of course, we hope to see the wages in more jobs rise sufficiently, such that there is no longer a need to mandate PWM wage increases. "
As PWM sectors negotiate wage requirements over the next few years, Singapore hopes to significantly uplift more workers, and over time more higher-level job roles can have their wages left to market forces.
"But for now, the majority of PWM workers still need the support and uplift from PWM requirements. We will certainly continue to monitor, and review PWM together with tripartite partners."
In concluding his speech, SMS Zaqy affirmed that Singapore will double down on efforts to implement PWMs effectively.
He stressed that employers must recognise that they have the largest influence on work-productivity outcomes – in transforming businesses and jobs, and supporting the continuous upskilling of workers. At the same time, he encouraged workers to do their part by embracing change and being open to work with technology.
"If we get this ecosystem right, we will not just uplift our lower-wage workers, but also enable our businesses to thrive and our economy to grow."
share on
