Government launches work group to look into wages, welfare of low-wage workers

SINGAPORE: A new work group that will come up with measures to address issues on the salaries and work environment of low-wage workers was launched on Thursday (Oct 29). 

The Tripartite Workgroup on Lower-Wage Workers will be spearheaded by Senior Minister of State for Manpower Zaqy Mohamad, and include members from the National Trades Union Congress (NTUC) and the Singapore National Employers Federation - representing workers and employers respectively. 

The aim of the work group is to raise the salaries and well-being of low-wage workers, particularly by improving the progressive wage model (PWM). 

The PWM refers to "wage ladders" aimed to increase the salaries of low-wage workers through upgrading their skills and improving productivity. It currently covers about 80,000 workers in the cleaning, security and landscaping sectors, and will apply to lift and escalator technicians in 2022. 

The work group will develop policy ideas that include ensuring wage growth in PWM sectors continue to outpace median wage growth, increasing the number of workers covered by the model and expanding the number of occupations covered by the PWM, the Ministry of Manpower (MOM) said in a statement. 

It will also push for more companies to offer progressive wages. 

READ: 470,000 lower-income Singaporeans to receive Workfare Special Payment payouts in October

Mr Zaqy said during a press briefing on Thursday afternoon that plans to bring the PWM into more sectors were already announced in Parliament in March, but this was disrupted by the COVID-19 pandemic. 

Now with the coronavirus battering the economy, the work group will have to figure out how businesses can raise the living standards of low-wage workers amid the downturn. 

“If you want to expand PWM today, you really have to think about how this impacts businesses today in the current context because ... as you know, companies are retrenching, firms are reviewing their head counts, the last thing you want is to scare them and you have inadvertent effect,” said Mr Zaqy.

He added that the discussion is not about “ideology” nor is the Government against minimum wage. 

READ: PAP, WP MPs debate minimum wage; 1.7% of local workforce earn below S$1,300 a month, says Koh Poh Koon

The work group will release an interim report in the middle of next year, and publish the full set of findings in the first quarter of 2022, MOM said. 

Mr Zaqy stressed that the study will look not just into wages, but also productivity, work conditions and the impact of other low-wage worker schemes. Wage models other than the PWM will also be evaluated to find one most “sustainable” for each sector. 

Sectors like cleaning and security have benefitted from the PWM because these services tend to be outsourced and wages in these industries were depressed before the model was introduced in 2012, he said. 

But with the push to improve productivity alongside wages, the PWM had little cost impact on consumers and businesses. However, the results could vary with other sectors. 

“So these are areas in which I think it's important for the unions and employers and the Government, to work through, to create a win-win situation,” he added. 

READ: Commentary: Singapore’s poorest earners will benefit from expansion of Progressive Wage Model but some conditions must be met

READ: PAP MPs call for faster roll-out of progressive wage model, higher workfare payouts for essential workers

MOM said that real incomes of sectors covered by the PWM grew around 30 per cent between 2014 and 2019, with more than the 21 per cent real income growth at the median for all sectors.

The work group’s formation was previously announced by Manpower Minister Josephine Teo and NTUC secretary-general Ng Chee Meng on Oct 11.