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Why no minimum wage?

03 Jul 2020 3 min read

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The answer to this and other important questions regarding jobs and wages were addressed by Manpower Minister Josephine Teo and Zaqy Mohamad at a “Straight Talk with PAP” session on 1 July.

Their session on “Uplifting Wages for All” also featured insights from three workers.

Why don’t we have a minimum wage or living wage?

A minimum wage sets the lowest amount which businesses can pay their workers across the country, while a living wage is the minimum income which a worker needs to meet basic needs.

Said Ms Teo, “That doesn’t quite make the best use of resources in different sectors.”

Rather than set a minimum benchmark, Singapore embraces a Progressive Wage Model (PWM) where workers are encouraged to move up a “ladder” of increasing wages, by acquiring more skills or taking on more responsibilities.

According to Mrs Teo, “Why do the bare minimum when we can do so much more? We want to be progressive.”

Currently, the PWM applies to the cleaning, security and landscaping industries. But the PWM will be expanded to more industries at the end of this year.

How does the PWM go beyond the dollar value of wages?

It motivates both employers, and employees.

Said Mrs Teo, “PWM provides a way for people to move up. For instance, top-performing security officers could become security consultants.”

Mr Zaqy added, “It motivates employers of blue-collared workers to improve job quality, and improve productivity, in order to pay staff more.”

In fact, some industries, like the bus industry, decided to adopt PWM of their own accord.

Any numbers to support how PWM has benefited workers?

Between 2014 and 2019:

  • Income grew by 26 percent for 40,000 cleaners
  • Income grew by 36 percent for 36,000 security guards
  • Income grew by 30 percent for 3,000 landscape maintenance workers

The income of the workers on the lowest “rung” of the PWM is quite low. How do you help them?

This is where Workfare – where the government tops up the income of lower-wage workers – comes in.

For lower-wage workers above the age of 55, on top of Workfare, the government pays them more money under the Special Employment Credit scheme.

So a 65-year-old cleaner whose basic monthly income was $1,500 would receive another $333 under Workfare, and another $120 under the Special Employment Credit scheme.

“They do not need to apply, this is automatic, based on their CPF payments,” said Mrs Teo.

Besides Workfare and the Special Employment Credit scheme, these workers also benefit from the Workfare Skills Support Scheme, and Silver Support Scheme.

Between 2016 and 2020, about $7.8 billion was spent on these schemes.

In fact, the majority of Workfare recipients own their own homes.

“That’s an aspiration for so many Singaporeans! We want to take care of (not just) the workers but also their families,” said Mrs Teo.

Stories from Workers

The session featured three workers who shared how they progressed in their jobs under PWM:

“In the past, cleaners didn’t quite use the chemicals to clean floors properly. PWM, together with the Singapore Workforce Skills Qualifications framework, ensured that the cleaners are equipped with skills in cleaning. I started off as a cleaner, now I’m a senior operations manager with a few sites under my care and around 100 cleaners under me.”

  • Ramli Bin Mohd Hussin (Building Construction And Timber Industries Employees’ Union)

“With PWM, we made it clearer the conditions for promotion. If you want to go up one level, you must know three routes and not just one, and you must know how to drive other buses like the double-storey bus. If you want to go further, you must know seven routes. I’m now a chief bus captain and I must know all 20-30 routes from my interchange, This encourages us to go and train.”

  • Fang Chin Poh (National Transport Workers’ Union)

“I have been in the security industry for 30 years. Before 2012 there was no PWM, we were known as jaga and we only carried a stick. After that, we were known as guards, security officers. We look forward to updating ourselves, especially in the use of technologies in security, and getting salary increments. My colleagues are very motivated.

  • Deepak Mandraj (Union of Security Employees)