No silver bullet to raising salaries of lower-wage workers: DPM Wong

SINGAPORE - While there is a need to address the growing wage gap in the country, there is no silver bullet to raising the salaries of lower-wage workers, said Deputy Prime Minister Lawrence Wong.

One school of thought would suggest raising the minimum wage to help narrow income disparity, he said on Saturday. But he added that such a move could lead to companies hiring fewer workers.

Speaking at a workshop for the Alliance for Action for Lower-Wage Workers, Mr Wong, who is also Finance Minister, noted that some countries that have the highest minimum wage structure have high income gaps and high unemployment rates.

"So there is no silver bullet in solving this problem. We always have to be careful as we work through solutions. We have to be careful about unintended consequences," he said.

Held at the Singapore Management University, Saturday's workshop, which is part of the Forward Singapore exercise, was the third this year under the Alliance for Action for Lower-Wage Workers, which was launched in March 2021.

The alliance is aimed at bringing together community stakeholders who are keen to start ground-up projects to uplift lower-wage workers.

The Forward Singapore exercise, launched by Mr Wong in June this year, is a year-long national conversation that aims to harness the views of Singaporeans to shape the nation's future and renew its social compact.

Addressing 30 participants from the labour movement, corporate and community sectors on Saturday, Mr Wong said advancing the well-being of lower-wage workers is an important priority of the Government and why it is putting a lot more resources into raising their income.

"The Government is co-funding quite a bit of the wage increases, in order to ease the transition. We are also spending more on Workfare, in order to uplift the wages of lower-wage workers.

"With progressive wages and Workfare combined together, we want to see lower-wage workers in Singapore have higher starting salaries. But we also want to see them have continued career progression throughout their working lives," he said.

Mr Wong added that it is not just about having good starting salaries, but also linking wage increases to a skills ladder.

He noted that a key attribute is how the Government does not derive solutions through a top-down approach but works in partnership with employers, union leaders and workers to achieve targets.

Citing the need for continuous skills training and skills upgrading of workers, and offering them more opportunities in the workplace, he said: "In many of these instances, we will need the buy-in from employers. It is very important.

"They play a critical role and we need to get employers to change their mindsets as well, from understanding the importance of the contribution of every worker to looking at wage dispersion within the organisation, but more importantly, just valuing the contributions of every worker within the organisation."

Senior Minister of State for Manpower Zaqy Mohamad, who was also at the workshop, said there are a few policies already in place to raise the salaries of lower-wage workers, such as the Progressive Wage Credit Scheme, where the Government co-funds salary increases of workers.

Mr Zaqy said society also has a role to play in helping uplift the lives of lower-wage workers. "Other aspects like rest areas, working conditions, making sure they get their rest hours, should be second nature to us as we think of them as employees who need rest and respect... and not be treated as second-class citizens."

Mr Lewin Low, a project consultant in the social impact sector, had precisely that on his mind after noticing workers resting on staircase steps and even next to a waste management facility.

The 27-year-old is leading a team of four who are working on a project called Rest Areas, and there has been progress.

At the workshop on Saturday, he said: "We have partnered with two shopping malls and a commercial building to implement rest areas for such workers.

"The team is also working on a guidebook on how to create rest areas for lower-wage workers."