Budget debate: Progressive wage model to cover up to 218,000 workers when extended to sectors like food services, retail

The Progressive Wage Model is currently mandatory in the outsourced sectors of cleaning, security and landscape maintenance.
The Progressive Wage Model is currently mandatory in the outsourced sectors of cleaning, security and landscape maintenance.ST PHOTO: DESMOND WEE

SINGAPORE - The Progressive Wage Model (PWM) will be expanded in the short term to cover up to nearly 218,000 workers - more than double the 85,000 currently.

Disclosing this on Wednesday (March 3), Senior Minister of State for Manpower Zaqy Mohamad said the increase in coverage will come from extending the model to up to 80,000 local workers in the food services and retail sectors, which have some of the largest numbers of lower-wage workers.

Some 50,000 in-house cleaners, security officers and landscape maintenance workers will also soon be covered, he added.

The PWM is currently mandatory in the outsourced sectors of cleaning, security and landscape maintenance.

It will be mandatory for the lift and escalator maintenance sector next year.

A PWM for the waste management sector is also in the works, and this is likely to benefit up to 3,000 workers.

Mr Zaqy, who was speaking during the debate on the Ministry of Manpower's (MOM) budget, said committees involving the Government, labour movement and employers are already in place and will make their recommendations on expanding the PWM to the new sectors by the end of this year.

For the extension of PWM to include in-house cleaners, security officers and landscape workers, Mr Zaqy said the Tripartite Workgroup for Lower Wage Workers will consult the affected sectors on a "suitable timeline to move forward".

Highlighting the benefits of PWM, he cited the example of Mr Alvin Goh, 50, who works as a security supervisor at Securite Associates.

Mr Goh joined the security industry in 2017 and was paid about $1,800 a month. Today, after moving up the PWM ladder through skills training, his gross wages have increased by more than 50 per cent.

Mr Zaqy also responded to Workers' Party MP Gerald Giam (Aljunied GRC), who noted that MOM figures showed there were still about 80,000 Singaporeans and permanent residents aged 15 and above working in other sectors and earning $1,000 or less a month.

That figure included part-time employees who work fewer hours so their gross wages would "naturally be lower", Mr Zaqy pointed out. "Similarly, for self-employed persons, the nature of their earnings and working hours are not comparable."

"Regardless of how the numbers differ, the important point is that lower-wage workers would receive Workfare support. In time to come, our aim is to cover them through progressive wages too," he said.

Mr Zaqy also addressed NTUC deputy secretary-general Koh Poh Koon and Leader of the Opposition Pritam Singh's concerns that the expansion of the PWM would lead to profiteering by certain companies.

Mr Zaqy said that MOM would study options with the relevant agencies to "keep a close watch" on this.

Mr Singh highlighted how some lift maintenance vendors had begun to "throw a steep increase in maintenance fees" in their discussions with Aljunied-Hougang Town Council.

To this, Mr Zaqy said since introducing the PWM for the lift maintenance sector for government contracts in 2019, the median gross monthly wages for full-time resident lift technicians had increased from around $3,300 in 2017 to nearly $3,800 in 2019.

"But, at the same time, our efforts may have some impact to consumer prices. This highlights why careful deliberation by tripartite partners is necessary as we expand to more PWMs," he added.

"No company should unjustly profit from the PWM, but we must also recognise that these moves will not be without cost. This is why Workfare continues to be important, as consumers and service buyers do not bear the cost impact of the wage supplements."

Non-Constituency MP Leong Mun Wai asked why MOM would not consider taking a "small step" to implement a "blanket living wage", considering the expansion of the PWM.

In her response, Manpower Minister Josephine Teo said: "Actually, we took that big step in 2007 through the introduction of Workfare. And this comes at no cost to the employers and, therefore, no disemployment risk to the worker."

She added that Workfare was broad base support provided to all lower-wage workers, not only through cash payouts, but also CPF contributions.