Budget debate: WP MP Gerald Giam moots 'fundamental reordering' of Progressive Wage Model for faster roll-out

WP MP Gerald Giam noted that the Progressive Wage Model only covers 15 per cent of workers in the bottom 20 per cent of wage earners.
WP MP Gerald Giam noted that the Progressive Wage Model only covers 15 per cent of workers in the bottom 20 per cent of wage earners.ST PHOTO: KUA CHEE SIONG

SINGAPORE - A Workers' Party MP has suggested applying a basic wage floor of $1,300 to many sectors at once so that the Progressive Wage Model (PWM) can be rolled out more quickly, instead of sector by sector.

This "fundamental reordering" of the framework will help to hasten the pace of reaching the Government's goal of having progressive wages in every sector, said Mr Gerald Giam (Aljunied GRC) on Thursday (Feb 25).

"Since the PWM is a 'minimum wage plus', we should focus on implementing the 'minimum wage' portion of the PWM across all industry sectors as soon as possible, then roll out the 'plus' portion only later where practical," he added, in reference to training requirements and career progression ladders.

In response, National Trades Union Congress deputy secretary-general Koh Poh Koon cautioned that a "pervasive minimum wage" that goes beyond what the industry can bear could lead to unemployment.

"We ought to bear in mind that the cure we're proposing cannot be worse than the disease itself," Dr Koh added.

Mr Giam had noted that the PWM was introduced in 2012 to raise the wages of low-wage workers. But nearly a decade later, it covers only 15 per cent of workers in the bottom 20 per cent of wage earners across three sectors: cleaning, security and landscaping.

Meanwhile, there are still about 100,000 workers who earn $1,300 or less a month in other sectors according to Manpower Ministry figures, he added during day two of the Budget debate.

Mr Giam then questioned why the NTUC is moving to expand the PWM to sectors such as strata management and solar technology which do not typically employ low-wage workers, calling the move "puzzling".

He also took issue with how the PWM requires workers to attend training to move up the wage ladder, noting that "training can only improve productivity only to a limit".

"In many low-wage occupations, there is a skills ceiling due to the manual nature of the work. How many more HDB blocks can a conservancy worker sweep if we send him for more training?" he asked.

Further training after basic training will only reap "diminishing returns" that will cost firms money and lost work hours, he added.

Mr Giam said the provision of government subsidies for training and time off from work also means that taxpayers will have to bear some of the cost of the PWM.

While the PWM's goal to provide career progression for low-wage workers is a worthy one to strive for, it has limited use for these workers whose priority is to earn enough to support their families, he added.

In his response, Dr Koh said the opposition MP did not address how his proposal would not lead to unemployment as a result.

"The labour movement always keeps saying this, that in pushing for too high a minimum wage, a minimum wage can become no wage," said the labour MP.

Mr Giam said he believes there would not be widespread unemployment if a reasonable wage floor is implemented, given that the existing PWM has not led to this effect in the cleaning, security and landscaping sectors.

Countering this, Dr Koh said the sectors have not seen increased unemployment precisely because they are PWM sectors.

The advantage of the PWM is having customised wage floors for each sector, taking into account what the industry, businesses and consumers are prepared to pay, even if implementing it is "a little bit more laborious", he added.

Mr Giam said the goal of the WP's proposal is to "get the minimum done first, so that we can progress on to the next step".