Singapore to push for voluntary adoption of progressive wage model in more sectors: Josephine Teo

SINGAPORE is looking to recognise companies that voluntarily adopt the progressive wage model (PWM) in sectors where it is not currently compulsory, such as food services and retail trade, Manpower Minister Josephine Teo said.

Speaking in Parliament at the debate on Motion of Thanks to the President on Tuesday, Mrs Teo noted that workers in sectors where the PWM is mandated have seen cumulative wage growth of around 30 per cent in the last five years, compared with 21 per cent for workers at the median.

However, the real question is the timing of expansion for the PWM, she said, noting that businesses are still trying to find a firmer footing in the midst of great uncertainty in the labour market.

"While it may be too risky to mandate PWM in more sectors right away, we can still promote its voluntary adoption by progressive employers that are able to do so," she said.

To give this effort a bigger push, the government will work with the tripartite partners to introduce a PWM Mark, she said.

"Companies that voluntarily pay progressive wages and provide job progression pathways to their lower-income workers will be recognised with this PWM Mark," she said.

Introduced in 2012, the PWM sets out a minimum pay for different job levels, with wage increases pegged to skills gained in the cleaning, security and landscaping sectors. It currently covers 80,000 workers.

During the July 10 General Election, the PWM was in the spotlight as candidates compared the framework with a possible national minimum wage, while asking if the PWM could be expanded to cover other sectors.

Mrs Teo said: "Although we have not legislated a single minimum wage across the board, we have in fact implemented features of a "Minimum Wage +" through the PWM in several sectors.

She noted that in sectors outside the PWM sectors, Workfare and the Special Employment Credit (SEC) have raised wages without risking unemployment.

For example, a 60-year-old worker drawing S$1,200 a month would get S$1,593 when SEC and Workfare are added - 33 per cent more than the employer's willingness to pay, she said.

"Had a national minimum wage been set at S$1,593 instead of boosting his income with SEC and Workfare, would the worker still have a job? Perhaps, if the labour market is very tight but perhaps not when economic conditions take a dive," she said.

Mrs Teo also addressed suggestions to use levies and quotas to regulate the number of Employment Pass (EP) holders. Last week, the Ministry of Manpower (MOM) raised the qualifying salaries for new EPs and S Passes.

She noted that at the work permit level, levies, on top of quotas, are used to regulate demand because the numbers are big. At the EP level where the numbers are not as big, the government's key objective is to regulate quality, she said.

By raising the salary requirements, this sets a higher bar over time that EP holders must reach to work in Singapore, while pushing EP holders at the lower end down to the S Pass-level where there are quota controls.

"In all past adjustments to EP salary requirements, a good number are downgraded to S Passes," she said.

She added that the MOM plans to engage an expanded group of employers to review their hiring practices.

This expanded group will include firms whose Singaporean core has been weakening, or whose EP and S Pass workforce are overly concentrated from a single foreign nationality source.

"Through active intervention, we will help them reshape their workforce profiles. We will do this together with economic agencies like EDB (Economic Development Board) and MAS (Monetary Authority of Singapore)," she said.