Progressive Wage Model implementation takes time due to negotiations, multiple considerations: Tan See Leng

The Progressive Wage Model was updated for the cleaning sector on June 7, with cleaners' wages to increase over 6 years from 2023. ST PHOTO: YONG LI XUAN

SINGAPORE - When it comes to implementing the Progressive Wage Model (PWM), negotiations are often not straightforward and the considerations of multiple parties - such as workers, employers and service buyers - need to be deliberated upon, said Manpower Minister Tan See Leng on Thursday (June 10).

The model is a ladder that sets out minimum pay and training requirements for workers at different skill levels.

Dr Tan was responding to criticism on why it takes a long time for the model to be implemented due to tripartite discussions.

It typically takes two to three years from the identification of a sector to be covered by progressive wages to the conclusion of negotiations and actual implementation of the model.

For example, for the cleaning sector, the PWM was announced in 2012 and took effect in 2014. Wages increased from 2017.

In the security sector, the PWM was announced in 2013 and implemented in 2016, with wages increasing from 2019.

Similarly, in the landscape sector, the PWM was announced in 2013 and implemented in 2016. Wages increased from last year.

Speaking at a virtual briefing on the behind-the-scenes workings of the PWM, Dr Tan said the aim is to implement a wage model that is not just beneficial to the sector, but also sustainable over the medium to long term.

There could be disengagement and "disemployment" over the long haul if a fast and blunt method "where we just decide and move on" is used, he said, referring to "disemployment" as a situation where workers are laid off when employers have to pay higher wages.

This may not necessarily achieve the long-term, desired end result of the PWM, which is to help workers acquire better skills and higher productivity, and reduce income inequality.

The briefing came on the back of an update to the PWM for the cleaning sector on Monday, which will see cleaners' wages go up each year over six years from 2023, among other things.

The model was launched for the cleaning sector by the Tripartite Cluster for Cleaners in 2012, and has been a compulsory condition since 2014 for the licensing of cleaning companies.

During Thursday's media briefing, NTUC secretary-general Ng Chee Meng addressed the downsides of having minimum wage as an alternative to the PWM.

A flat minimum wage that is set too high could create "disemployment" and a loss of jobs as workers are made redundant, if businesses are unable to accommodate the increased costs, Mr Ng said.

"If you set it too low, then it becomes actually a wage ceiling... so even though the PWM is a more involved process that may take a bit more time, we are still going at it, to really reduce the downsides of minimum wage to PWM... (and give the PWM) a runway to raise wages."

Dr Tan noted that there will be three more sets of recommendations in the pipeline in the coming months.

These will be for wage increases in the security, landscape as well as the lift and escalator sectors.

The newly formed tripartite clusters for food services, retail and waste management PWMs are also making headway, Dr Tan added.

The Tripartite Workgroup on Lower-Wage Workers is also looking at ways to cover the various occupational groups under progressive wages. This will benefit low-wage workers employed in similar occupations but distributed across the various sectors. More plans will be announced soon.

The role of the tripartite clusters, comprising representatives from the labour movement, industry, service buyers and the Government, is to oversee the entire implementation process of the PWM, Dr Tan added.

On top of coming up with the recommendations - in terms of wage increases and over how long a period of time - they also have to oversee the development of job ladders, skill sets and training required, and wage benchmarks for each particular job rung, said Dr Tan.

A periodic review of the PWM is also needed to make sure that it is relevant.

"In an economy that's moving along, certain parts will move faster, certain parts will move slower and some parts may not even move... employers must be able to afford (the wage increases), and at the same time, they can also service buyers' needs, their concerns, and importantly, the expectations and also their willingness to pay," Dr Tan said.

All this will go into negotiating wage benchmarks, as well as improving overall working conditions of the workers, for example, access to reasonable rest areas, he added.

Senior Minister of State for Manpower Zaqy Mohamad added that "it took us some years to understand" the cleaning, security and landscape sectors.

"Why it was a bit more cautious initially was also because the industry was learning - 'what is the PWM and how do we transform ourselves to meet it?'," said Mr Zaqy, who chairs the Tripartite Workgroup on Lower-Wage Workers.

"It also takes time for industries to transform... The transformation now enables them to re-engineer themselves and be able to pay workers better. A lot of that work also involves industry adjusting.

"Then, once they have adjusted, like the cleaning sector today, and they are more confident... they say 'yes, we can do it because we know how PWM works'."

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