Debate on ministries’ budgets

S'pore way of helping better serves needs of low-wage workers

Minister of State for Manpower Zaqy Mohamad
Minister of State for Manpower Zaqy Mohamad

Giving layers of support meets varied needs better than minimum or living wage: Zaqy

The Singapore approach - providing multiple layers of support for low-wage workers and their families - meets the varied needs of individuals better than a minimum or living wage, Minister of State for Manpower Zaqy Mohamad said yesterday.

The cost of a key plank of such support - Workfare - is borne fully by the Government, and incomes have grown, particularly those of low-wage workers, he told Parliament.

Between 2012 and 2017, real wages of workers at the 20th percentile grew by 24 per cent in total, faster than incomes at the median, which grew by 21 per cent. This is for Singaporeans in full-time work, including employer contributions to the Central Provident Fund, and before government transfers.

Low-income Singaporean households also saw household income grow by about 26 per cent in real terms over those years, higher than the 24 per cent for households at the median, said Mr Zaqy.

At the same time, the employment rate for Singaporeans and permanent residents aged 25 to 64 remained high, at about 80 per cent.

Speaking on efforts to tackle inequality and ensure social mobility, Mr Zaqy said the Government must stay focused on three strategies to continue getting such outcomes.

First, maintain a thriving economy with a tight labour market, and create better jobs.

MORE EFFECTIVE HELP

Our approach of providing multi-layered support is more responsive to the varied needs of individuals than any single minimum or living wage.

MINISTER OF STATE FOR MANPOWER ZAQY MOHAMAD

Second, strive for quality growth based on productivity improvements that all Singaporeans can benefit from.

Third, support lower-income workers in general and in specific sectors to ensure they can progress with the rest of the workforce.

One key support measure is the Workfare Income Supplement (WIS) scheme, which is being enhanced to help more workers.

Finance Minister Heng Swee Keat said in his Budget speech last month that the qualifying income cap for WIS will be raised from the current $2,000 to $2,300 per month from January next year. The maximum annual payouts will also be increased by up to $400.

These enhancements will lead to almost $1 billion being paid out to close to 440,000 WIS recipients next year, including some self-employed people, Mr Zaqy noted. The Government will continue to review the scheme regularly, he said.

Older workers will continue to get higher payouts, as they have less runway to upgrade their skills and save for retirement compared with younger workers, he said, replying to labour MP Zainal Sapari (Pasir Ris-Punggol GRC) on removing the age differentiation.

Mr Zaqy also said that from 2007 to 2017, 830,000 Singaporeans received $5.5 billion in Workfare payouts.

The cost of this wage top-up is not passed on to employers or consumers, he said, adding that there are also other forms of government support, such as Utilities-Save rebates and medical subsidies under the Community Health Assist Scheme, to help low-income workers meet their living needs.

"Our approach of providing multi-layered support is more responsive to the varied needs of individuals than any single minimum or living wage," he said.

There have also been efforts to raise the skills and productivity of low-wage workers. Since the Progressive Wage Model (PWM) was implemented to set out career pathways and minimum pay for various skill levels in the security, landscape and cleaning sectors, workers there have seen positive real wage growth, said Mr Zaqy.

Between 2012 and 2017, resident full-time security guards, landscape maintenance workers and cleaners had real wage increases of 23 per cent, 36 per cent and 44 per cent, respectively, compared with 21 per cent for the median resident worker, not including employer CPF contributions. Over 70,000 resident workers have benefited from the PWM so far, said Mr Zaqy.

The model is being extended as a compulsory requirement in the lift maintenance sector next. The Ministry of Manpower will also explore facilitating the use of the model on a voluntary basis in other sectors. Voluntary PWMs have been set up in the public transport and healthcare sectors.

A version of this article appeared in the print edition of The Straits Times on March 06, 2019, with the headline 'S'pore way of helping better serves needs of low-wage workers'. Print Edition | Subscribe