New Progressive Wage Model Mark to spur adoption of 'minimum wage plus'

Sectors like food services and retail trade have the potential to come on board the Progressive Wage Model, said Manpower Minister Josephine Teo. PHOTO: ST FILE

Companies which voluntarily pay progressive wages and provide job advancement pathways for lower-income workers will be recognised with a Progressive Wage Model (PWM) Mark, as part of efforts to lift wages for lower-income workers, Manpower Minister Josephine Teo told Parliament yesterday.

Sectors such as food services and retail trade have the potential to come on board, which would expand the implementation of the PWM - which she described as a "minimum wage plus" - beyond the three sectors where it is currently mandated: cleaning, security and landscaping.

Speaking during the debate on the President's Address, Mrs Teo said that for the PWM Mark to work, there must be a broader movement involving the entire society.

"As consumers, we must be prepared to pay slightly more, and intentionally support such progressive companies by purchasing their products and services. This will spur more companies to be progressive and adopt the PWM Mark, which in turn will benefit our lower-income workers," she said.

The PWM, pioneered by the National Trades Union Congress (NTUC) in 2012, sets out minimum pay and training requirements for workers at different skill levels and covers some 80,000 workers across three sectors.

Speaking earlier yesterday, NTUC deputy secretary-general Koh Poh Koon highlighted that efforts taken by the tripartite partners before the Covid-19 pandemic will lead to the PWM becoming mandatory for the lifts and escalator maintenance sector. It will take effect in 2022.

The labour movement is also in discussions to see how the model can be implemented for the waste management sector, he added.

Dr Koh, who is also Senior Minister of State for Health, called for greater regulation, adding that waiting for the market to move on its own will not produce results. "In moving towards a universal PWM, we should explore setting a sectoral wage benchmark for companies as a first step in sectors where there are currently no regulatory levers to mandate a PWM," he said.

Sectoral wage benchmarks may get more companies in sectors with a more variegated employment landscape, such as food services and retail, to uplift the livelihoods of low-wage workers, Dr Koh noted.

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An emotional moment as Manpower Minister Josephine Teo addresses Singaporean workers and Workers' Party chairman Sylvia Lim calls for a review of race-based policies.

Both Mrs Teo and Dr Koh acknowledged that it is not the best time to raise wages, given the current global health and economic crisis.

"Timing is important. We do not want to put businesses out of action through escalating wage costs in an economic downturn, nor do we want to deter hiring of workers in a distressed job market with rising unemployment rate," Dr Koh said. "Even as we endeavour to help low-wage workers, we must make sure a balance is struck, so that 'low-wage' does not become 'no-wage'."

Mrs Teo said that while it may be risky to mandate the model in more sectors at present, the Government can still promote its voluntary adoption, which is the rationale behind the introduction of the PWM Mark in collaboration with tripartite partners.

She noted that the Government has complemented the PWM with Workfare benefits and skills training for low-wage workers.

Workers in the three sectors where the PWM is mandatory have seen cumulative wage growth of around 30 per cent in the last five years, compared with the median cumulative wage growth of 21 per cent.

But there is scope for expansion, Dr Koh said, as the sectors where PWM is mandated represent 15 per cent of all the workers in the lowest 20th percentile of salary ranges.

Singapore should leverage skills ladders mapped out by SkillsFuture Singapore to move towards a universal PWM across all lower-paying job roles, he said.

Mrs Teo said that in other sectors that are not covered by the model, Workfare and the Special Employment Credit have also raised wages.

She outlined the four prongs of the Government's preferred approach to uplift low-wage workers: regularly adjust Workfare; raise wages in PWM sectors at an appropriate pace; expand PWM over time to more sectors; and raise standards of living for lower-income workers through ways such as acquiring skills, home ownership and access to quality healthcare and education.

This approach has been supported through measures such as expanded Workfare coverage and higher payouts introduced this year, and a Workfare special payment of $3,000 to cushion the impact of the Covid-19 pandemic, added Mrs Teo.

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A version of this article appeared in the print edition of The Straits Times on September 02, 2020, with the headline New Progressive Wage Model Mark to spur adoption of 'minimum wage plus'. Subscribe