GE2020: Singapore's progressive wage model allows workers to 'move up the ladder', says Josephine Teo
SINGAPORE: Singapore’s progressive wage model is better than having a minimum wage or living wage as it “provides a way for people to move up", said Minister for Manpower Josephine Teo.
A minimum wage sets the lowest amount which businesses can pay their workers across the country, but that does not make the best use of resources in different sectors, said Mrs Teo.
"In some sectors, they value people to a different degree so they are willing to pay more. If we had a flat minimum wage that cuts across all sectors, then in some sectors where the companies are actually able to pay more, they won’t," she said.
"What we want to do is much more than the minimum. In Singapore, we ask ourselves the question – are (the workers) happy with just earning the minimum, or actually they would prefer the opportunity to move up, to progress?"
Mrs Teo made the comments in an online dialogue session posted on the People’s Action Party's (PAP) Facebook page on Wednesday (Jul 1).
She cited the example of top-performing security officers who could earn more by becoming security consultants.
"The progressive wage model, what it does is that it allows individual workers to move up the ladder, and how they can do so is by acquiring more skills through training and by taking on larger responsibilities," she added.
First implemented for the cleaning sector in 2014, the progressive wage model refers to a wage ladder which helps workers grow their salaries as they acquire skills and improve productivity.
The progressive wage model has also been introduced for the security and landscaping industries, and is expected to be expanded to include more industries by the end of this year.
The bus industry has also voluntarily implemented the wage model.
“It motivates employers of blue-collared workers to improve job quality and improve productivity, in order to pay staff more,” added Minister of State for Manpower Zaqy Mohamad who was at the dialogue.
According to a post on the PAP website summarising the dialogue, the progressive wage model has benefited 40,000 cleaners who saw their incomes grow by 26 per cent between 2014 and 2019.
In the same period, incomes grew by 36 per cent for 36,000 security guards, and by 30 per cent for 3,000 landscape maintenance workers.
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The post also noted that while income for workers on the lowest rung of the progressive wage model was low, it was supplemented by Workfare, where the Government tops up the income of lower-income workers.
Lower-wage workers above the age of 55 also get money from the Special Employment Credit scheme, on top of Workfare.
An example was given of a 65-year-old cleaner with a basic monthly income of S$1,500, who would receive S$333 under Workfare and another S$120 under the Special Employment Credit scheme.
“They do not need to apply, this is automatic, based on their CPF payments,” said Mrs Teo, who is leading a four-member PAP team contesting in Jalan Besar GRC.
Various opposition parties, including the Workers’ Party and the Singapore Democratic Party, have called for a minimum wage, while the Progress Singapore Party has made living wage one of the proposals in its manifesto.
On Thursday, National Trades Union Congress secretary-general Ng Chee Meng - who is leading a PAP team contesting the new Sengkang GRC - also defended the progressive wage model, describing it as a better policy because it includes an element of productivity which benefits businesses.
A minimum wage for workers could lead to retrenchments if employers are unable to pay the stipulated amount, Mr Ng said during a Facebook live session.