NTUC Deputy Secretary-General Koh Poh Koon spoke in favour of the Progressive Wage Model (PWM), welcoming the Government’s move to form a Tripartite Workgroup to push for faster and wider implementation of the model across various sectors.
Mr Koh shared his views in Parliament on 14 October 2020.
He said that the PWM, which was part of the “Triple Uplift” formula, has helped increase the wages of low-wage workers over the past decade.
Mr Koh shared that significant progress on wages have been made over the past 10 years.
He said that wages of workers at the lowest 20th percentile over the last five and 10 years have made real term increases of 24 and 39 per cent respectively.
He also stated that income inequality in Singapore is at its narrowest in almost 20 years.
“All these did not happen just by itself … It is brought about by sound economic policies, and tripartite partners working actively to intervene in the labour market,” he said.
Mr Koh added that the “Triple Uplift” formula of the PWM, together with the Workfare Income Supplement (WIS), and the National Wage Council (NWC) recommendations, were responsible for the changes.
He further elaborated that the PWM had lifted the wages of close to 80,000 cleaners, security officers and landscape workers, increasing their wages by some 30 per cent without the risk of job loss.
“The PWM also enables them to climb a skills-ladder, improving their future employability and wage progression,” he said.
Mr Koh clarified that he was not ideologically against the concept of a minimum wage, pointing out that the first rung of the PWM wage ladder is a form of a sectoral minimum wage.
“The idea of having some form of a minimum wage is not new, and we share the objective to uplift the incomes of low-wage workers. Where we differ is the approach to getting there,” he said.
Mr Koh explained that it is difficult to find a basis to set a single minimum wage across different sectors.
He said that the benefit to workers would be limited if the minimum wage is not set high, which defeats the purpose of the implementation. On the other hand, if the minimum wage set too high, businesses may not be able to afford the increase and would pass the costs to the consumers.
“There must be a basis for setting the minimum wage for each sector, and it must be sustainable.
“Veteran union leaders with long experience on the ground, understand the importance of working this out and arriving at a tripartite consensus, so that low wage does not inadvertently become no wage,” said Mr Koh.
In expanding PWM, Mr Koh suggested studying other approaches to complement the existing PWM efforts.
He quoted an example of setting a sectoral wage benchmark as the first step for companies in sectors where there are currently no regulatory levers to mandate a PWM.
Mr Koh argued that the benchmarks would be a good first step towards empowering workers with greater awareness of wages in their occupations and sectors.
“This can be done through leveraging various data sources that we currently have, such as the Occupational Wage Survey,” he said.
He concluded that the data gathered over the past decade showed that the Government and the tripartite partners have helped uplift the wages of the lower-wage group.
“NTUC and the tripartite partners will focus on the real hard work of uplifting wages of low-wage workers and seek public support to make meaningful moves while protecting our society from the downsides,” added Mr Koh.
Speaking on behalf of the Ministry of Manpower, Senior Minister of State Zaqy Mohamad supported Mr Koh’s take on the PWM.
He stated that in the three sectors [cleaning, security and landscape] where the PWM has been made mandatory, real incomes have increased by around 30 per cent, outstripping the 21 per cent real income growth median of all sectors.
Mr Zaqy quoted other examples such as the incomes of the 10th percentile of full-time resident workers, which currently stands at $1,517. The figure is a 50 per cent increase from 2010, which stood at $1,000.
He also explained that countries such as Norway, Denmark, and Sweden have managed to establish a vibrant and cohesive society, despite not having a single minimum wage.
“In place of a single minimum wage, these countries have robust dialogues between stakeholders, resulting in collective agreements on wages at the sectoral level. This is akin to our [Singapore’s] sectoral tripartite approach in our existing PWMs and future tripartite efforts,” said Mr Zaqy.
He assured the House that the Tripartite Workgroup will study issues to the benefit of low-wage workers.
