SINGAPORE - Within the next two years, almost all local workers will make at least $1,400, and others holding traditionally low-paying jobs as drivers and administrative assistants will get even more, as the Government redoubles its effort to speed up wage growth for lower-wage workers.
It will do this through a major expansion of the existing progressive wage model (PWM), which will be extended to include more sectors, and to cover specific occupations across sectors.
These two measures, together with the existing efforts, will cover up to eight in 10 lower-wage workers.
The proposals come from a national workgroup made up of representatives from the Government, unions and employers, tasked to improve the wages and well-being of lower-wage workers. These came under the spotlight during the Covid-19 pandemic.
The Government has accepted all the 18 recommendations by the workgroup, which released its full report on Monday (Aug 30), a day after Prime Minister Lee Hsien Loong announced its key proposals.
Senior Minister of State for Manpower Zaqy Mohamad, who heads the Tripartite Workgroup on Lower-Wage Workers, unveiled the report at a press conference last Saturday, flanked by NTUC secretary-general Ng Chee Meng and Singapore National Employers' Federation (SNEF) president Robert Yap, as well as Manpower Minister Tan See Leng and Communications and Information Minister Josephine Teo, who was the adviser to the group.
Mr Zaqy said: "The recommendations take our existing efforts to a new level - with steady and bold steps ahead - to build a more inclusive Singapore, so that our lower-wage workers can achieve progress through solidarity and dynamism."
He noted that employers are still facing economic headwinds brought on by the Covid-19 pandemic, and added: "It was not easy for employers, we had tough conversations, but we agreed and achieved consensus on the outcomes, which will also minimise the risk of disemployment."
He also said that the report had to be seen in the light of past efforts to help low-wage workers, and many of its recommendations build on what has been done in recent years.
A key plank of the workgroup's strategy is to expand the existing progressive wage approach to boost the wages of the lowest earners here, who take home $2,033 and below each month.
Existing PWMs in the cleaning, security and landscape sectors cover about 10 per cent of the 283,000 low-wage workers here who work full time.
The workgroup wants this to be expanded to more sectors such as retail, food services and waste management. It also proposed an occupational PWM, which will cover all drivers and administrative assistants regardless of which sector they work in. These moves will cover another 37 per cent of low-wage workers.
Meanwhile, leveraging the Local Qualifying Salary (LQS) scheme, which currently mandates that companies must pay at least some of their local workers the LQS of $1,400 if they want to hire foreign workers, will cover another 35 per cent of low-wage workers.
Already, studies have shown that the LQS regime has an effect on raising wages. Some 60 per cent of local workers earning the then quantum of $1,300 saw their wages go up when the LQS was increased to $1,400 in 2020, according to government statistics.
PM Lee, who had announced this on Sunday, said the LQS will be adjusted from time to time.
Mrs Teo, who was Manpower Minister when the workgroup was formed, said the LQS should be treated as a new baseline wage for low-wage workers.
She added that it takes time for the PWM to be rolled out in the different sectors as it involves developing a skills ladder and matching it to the wage ladder. Using the LQS as a level will help achieve a baseline wage while work on the PWM proceeds.
Mr Ng, the labour chief, added that the labour movement will continue to identify more sectors for the PWM, and some already mooted include the pest management, strata management and the renewable energy sectors.
The ultimate aim is for the baseline wage growth of low-wage workers to outpace median growth by a "substantial margin" until they have made sufficient progress, said the report.
It added that wage growth would also have to outpace productivity growth at the individual level, given the limit to productivity growth in many low-paying jobs.
The workgroup further proposed that the National Wages Council determine the range of progressive wage growth.
Another one of its proposals is for the Government to regularly review the Workfare Income Supplement, which tops up the incomes of lower-wage workers.
The workgroup also urged society to play a stronger and more active role in improving the well-bring of lower-wage workers by supporting companies that pay such workers progressive wages.
It proposed a Progressive Wage Mark accreditation scheme to flag firms that are playing their part, so that consumers can support these firms. This is expected to help boost the wages of another 12 per cent of the 50,000 low-wage workers not covered by the other schemes.
The higher wages for low-wage workers are expected to lead to higher prices for goods and services for consumers, the workgroup noted.
But it added that surveys by the Government in the past year showed that people were willing to pay more if they knew that the increase in costs would go towards supporting pay increases for lower-wage workers.
Mr Zaqy said: "Our society has to appreciate the status of all trades. You have to be prepared to pay more for goods and services. This means that our low-wage workers can take home a better pay... and provide for their families so that they can all enjoy a higher standard of living."
Together, the measures - to be rolled out in phases from Sept 1 next year and March 1, 2023 - will significantly raise incomes for 94 per cent of all lower-wage workers here, said the report.
Dr Tan added during the press conference on Saturday that the last 6 per cent of low-wage workers not covered by the wage measures were those working for small outfits, such as heartland shops and neighbourhood minimarts.
SNEF's Mr Yap expressed the support of employers, saying: "We understand the importance and why we need to do it... but businesses also have to be sustainable."
He said he was heartened that the changes would be phased in as many companies are still reeling from the effects of the Covid-19 pandemic.
He also welcomed the workgroup's call for the Government to provide transitional support for companies in the form of offsets for wage increments to cushion the impact on businesses.
The 16-member workgroup, set up last year as Singapore grappled with the effects of the Covid-19 pandemic that hit lower-wage workers especially hard, took 10 months for consultations and deliberations, speaking to more than 1,800 workers, employers and others.
The recommendations are meant to guide Singapore's progressive wage strategy over the next 10 years.
Mrs Teo said the Covid-19 pandemic had put lower-wage workers in the spotlight, with many of them in front-line jobs and helping to keep the community safe and healthy. Yet, despite the important role they played, they often had to worry about job stability and prospects, she added.
Dr Tan thanked the workgroup for its efforts, saying: "They have proposed a road map for this decade that will refresh and renew our social compact to build an inclusive economy and society."
"From one in 10, the coverage of lower-wage workers will go up to nine in 10. I am confident that with a strong tripartite approach, we will be able to bring about significant improvement and change," he added.
Correction note: The Local Qualifying Salary was increased to $1,400 in 2020 and not 2018 as previously reported. We are sorry for the error.