The Progressive Wage Model – sounds sexy, but what is it?

Much has been argued about the minimum wage model in Singapore in recent weeks and whether it’s right for our country.

The minimum wage ‘camp’ has been adamant about protecting low-wage workers through the implementation of statutory minimum wage while at the opposite end Singapore’s labour MPs have been discussing the benefits of the Progressive Wage Model (PWM).

 

But do we actually understand what PWM entails? To be honest, it’s quite an easy concept to understand. In fact, I think it’s even easier to understand than the minimum wage model! I decided to come up with a quick FAQ to make everything clearer so that all Singaporeans can make an informed decision on which model they feel best suits their needs.

 

Q: How does PWM compare to a minimum wage model?

A: We all already know that minimum wage refers to the minimum salary a worker should be paid for any work he or she carries out. Countries like Australia and Malaysia have them. The benefits and challenges of the minimum wage model have been well-documented and debated the world over. Some say that if the government sets the bar too low, it does not really help workers (eg. Taiwan). On the other hand, if the government sets the minimum wage too high, the state runs the risk of higher unemployment (eg. European Union). The debate still goes on. You can say that the PWM is an ‘evolved’ wage model, probably even ahead of what the rest of the world has done. The PWM is more than just ensuring the minimum wage for a worker. Rather, the worker gets paid according to his or her level of skill and productivity and he or she can embark on a journey of skills upgrading in order to climb the wage ladder.

 

Q: I still don’t get it…a wage ladder?!

Imagine a step ladder where you have salary tiers. A worker has to climb the step ladder in order to get to the next level. To get to the next level, they would have to go through a process of upgrading their skills and increasing productivity. At the same time, their employers would have to make a commitment by providing ample opportunities for employees to grow in their careers. To ensure this, the respective union clusters work out a progressive wage model that is tailored to each sub-sector, such as the security sub-sector or the cleaning sub-sector. That’s the PWM in a nutshell.

 

Q: There isn’t a standard PWM track across all sectors?

Different sectors operate differently, so while the actual implementation of PWM is tailored to the needs of the sub-sectors, the basic principle of the PWM – which is to help workers attain better wages progressively – remains the same regardless of sector. For example, the Labour Movement’s Building and Facility Management Services Cluster (consisting of seven unions) is targeting to help an initial 10,000 cleaners to achieve better wages through various strategies and programmes. As a start, some 7,000 cleaners for the civil service are receiving a minimum monthly salary of $1,000 as part of the government’s re-accreditation scheme to award government contracts only to cleaning agencies that provide a pathway for cleaners to up-skill and progress to higher wages – starting from that minimum wage point. The median wage of cleaners for these positions was between $675 and $950 before the PWM kicked in.

 

Q: Isn’t this minimum wage packaged differently?

It is the same only in one aspect, which is the minimum wage point. However, PWM doesn’t stop at the minimum point but looks at the wage pathway as a progressive journey, which means workers don’t get stuck at the lowest wage level. Instead, employers are encouraged to actively train their staff and look at ways to improve work processes to increase productivity and meet higher service standards. Also, as employers invest more in technology and re-design jobs to improve overall productivity, they help their workers climb the ladder and achieve higher wages. So you avoid a situation where employers suddenly face increased operating costs while employees get paid more for doing the same work without any increase in productivity. You can say it’s a win-win situation for the employee and employer.

So, does this shed some light on the PWM? Do you agree with this approach?

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Lavinia Lim

Yoga, writing, dancing, reading....

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