The Straits Times says

Give low-wage workers a boost

Raising the wages of workers at the very bottom has always been a delicate tripartite exercise. Firms must remain viable but unconscionable wage gaps would undermine social stability and place a greater burden on support systems funded by taxpayers. Uplifting basement-level wages by government fiat has been avoided because it has led to negative results elsewhere. Hence the approach here of patient wage negotiation involving unionists, employers and the Government, as well as of reliance on a progressive wage model. That is applied via licensing to sectors where cheap tenders have fuelled a race to the bottom.

The fifth iteration of the National Wages Council's (NWC's) annual push to improve the lot of the lowly paid serves as a reminder of the embedded resistance to providing them a decent wage. They struggle to maintain households on monthly pay that is below $1,100 - a mere 28 per cent of the median monthly income. To put that in greater perspective, the average four-person household's monthly spending on essential needs such as food, clothing and shelter is about $1,250.

To begrudge those at the bottom a pay rise of $50 to $65, as recommended by the NWC, could consign them to a hand-to-mouth existence. Meanwhile, those benefiting from their cheap labour would be employers chasing after multiple contracts in the cleaning, security and landscaping sectors; as well as customers who demand the lowest prices, never mind the social impact of wage inequality.

To help push up wages, the Government awards contracts for cleaning and security, for example, to companies that demonstrate a focus on quality and performance standards, and not just to those offering the cheapest quote. But this is not changing industry practices as government contracts cover only 11 per cent of local cleaners and security guards. Clearly, the private sector has to play the bigger role in this respect. Disappointingly, only 18 per cent of firms accepted the NWC's guidelines for low-income workers last year. Notably, unionised companies were more willing to do so. The Singapore National Employers Federation was undoubtedly being realistic in saying that while it is explaining the guidelines to members, "for companies that really cannot afford it, we are not pushing". But shouldn't it be giving those who can more of a nudge? Differences between a nudge, push and shove are significant, of course. The NWC has been nudging firms for years, and the Government is not shoving, to stay true to the spirit of tripartism. Therefore, it's for buyers of outsourced services to scrutinise the business model, human resource management and performance commitment of suppliers. Do the firms value skills training, productivity, service quality and progression pathways for Singaporean workers? If not, society at large must push.

A version of this article appeared in the print edition of The Straits Times on June 03, 2016, with the headline 'Give low-wage workers a boost'. Print Edition | Subscribe