SINGAPORE – The real wages of low-wage Singaporean workers and permanent residents at the 20th percentile rose 39% between 2009 and 2019, faster than that of workers at the median at 33%.
And while the Covid-19 pandemic impacted these low-wage workers last year, government programs have helped mitigate the impact and bring their wages back to pre-2019 pandemic levels, a Minister of State for Manpower Zaqy Mohamad said in Parliament on Tuesday, July 6.
This was the result of policies such as the Progressive Wage Model (PWM) and Workfare to support low-wage workers, he added. “This has allowed our low-wage workers to gain ground and advance faster than the median.”
He answered more than a dozen questions asked by MPs from the People’s Action Party and the Workers’ Party about the PWM.
Zaqy noted that while low-wage workers in Singapore have experienced “solid growth in real incomes,” this has not been the case for most of the Organization for Economic Co-operation and Development (OECD) countries. .
“For example, over the same 10-year period, 20th percentile workers in the UK saw no real wage growth, while those in Japan and the US saw only one. cumulative growth in real wages of 3% and 6% respectively, despite minimum wages, “he said.” Nevertheless, we must not take our progress for granted. It is not inevitable that it will always be so. “
The PWM is a salary scale that defines the minimum wage and training requirements for low-wage workers at different skill levels in various industries.
It is currently mandatory in the cleaning, security and landscaping sectors and affects around 85,000 workers.
Discussions are underway to implement PWM in the foodservice, retail and waste management industries, as well as to extend coverage to in-house cleaning, security and fit-out workers. landscaped.
These measures will more than double PWM coverage to 218,000 workers, Zaqy said.
Low-wage workers also receive a monthly income supplement through the Workfare program, which is designed to encourage them to work regularly rather than relying on social measures, Zaqy said.
“Studies have shown that Workfare has resulted in increased employment rates, with the largest increases seen among older workers,” he said.
Since the introduction of Workfare in 2007, nearly one million low-wage workers have received nearly $ 7.8 billion in payments, Zaqy said.
An additional $ 600 million has been paid to employers and workers through the Workfare Skills Support program, which helps low-wage workers upgrade their skills.
When the Covid-19 pandemic began last year, the Workfare Income Supplement and the Workfare Special Payment of $ 3,000 helped cushion declining wages for low-wage workers, Zaqy said.
“After taking this into account, the earnings of the top 20 percent of employees in 2020 were actually similar to salaries in 2019,” he said.
The government’s basic goal is to make sure that society takes care of every worker, Zaqy said.
“We cannot move forward as a society and make economic progress with a strong social pact and national identity, if there is a group of workers who are left behind,” he said. “We need to make sure that every worker willing to work hard will be able to earn a fair wage and prosper with the rest of Singapore.”
With the Covid-19 pandemic still raging, it is time for efforts to be made now to bolster their prospects and long-term progress, Zaqy said.
This is why the Tripartite Working Group on Low Wage Workers was formed last year and will publish its recommendations “in the coming months”.
Compared to 2012, when the PWM for cleaning was first introduced, the attitudes of employers and service buyers have changed, Zaqy said.
“Today, all PWM stakeholders are embracing the same vision and working together to support our low-wage workers. Employers now understand the benefits of PWM for them and their workers,” he added.
This is why the cleaning industry has recently been able to accept “a much more ambitious rate of wage growth” for workers, Zaqy said.
Last month, the government accepted the recommendations of a tripartite committee on the cleaning wage scale to increase the minimum wage for cleaners from 2023 to 2028. The first adjustment in 2023 will see basic wages for general cleaners and interiors increase by nearly 20%, from $ 1,312 in 2022 to $ 1,570.
This was achieved through negotiations between unions, employers and service buyers to find common ground, Zaqy said.
He added that “PWM’s negotiated approach helps address concerns and allows the industry to raise wages at a pace that suits them.”
This approach also allows industry stakeholders to plan ahead and factor PWM salary increases into their multi-year contracts, and a mid-term review by the tripartite committee ensures that salary increases remain sustainable. Mr. Zaqy said.
He added that the Covid-19 pandemic has shown the PWM approach to be “greater than a blunt minimum wage”.
“A brutal minimum wage may not have been able to achieve consensus or such ambitious wage growth. Sectors such as tourism, aviation, hospitality and others, which are seriously affected. affected would not have been able to accept such a decision, ”Zaqy said.
“Our focused approach allows the tripartite movement to advance PWM at a pace based on the performance of different sectors in the market.”