Legislating wage – slaughter of a sacred cow?

Benjamin earlier wrote about the legislation of wages in the cleaning sector, and it’s announced yesterday by the NTUC.

Slightly more than a year after it introduced the Progressive Wage Model, NTUC has successfully worked with the Government and cleaning industry to put the model into legislation.

Wage legislation is quite a “sacred cow”.  We all know and are familiar with the Singapore’s Government’s resistance towards a legislated wage system.

After resisting the minimum wage law for so long, the tripartite family finally knocked out a form of wage structure that will force employers to pay a “minimum salary”, albeit only for a select sector of workers.

The targeted nature of the scheme will ensure that the lowest paid in the country gets a wage-lift.  This is probably more effective than an across-the-board minimum wage which can be quite blunt on its own, and does not reflect the different value of jobs.

E.g. in our minds, cleaning is always perceived as lower-valued compared to say serving at the counter in a fast-food joint, but in reality the job of the cleaner is more back-breaking, and perhaps more important because a dirty restaurant turns away more customers than a friendly or efficient counter-service can draw.

But in a minimum wage regime, both may get the same minimum salary. While the legislation of progressive wages in the cleaning industry may still not address such market syndromes, it provides a pathway forward.

What I like about the progressive wage framework vis-a-vis a flat minimum wage, is that a cleaner will not have his wage stuck at one level, but has a structure to move his pay up through taking on higher value work and upgrading his skills.

It also preserves the flexibility and freedom of negotiation between worker and employer, placing more bargaining power in the hands of the worker.

This works not just for the cleaning sector but also across sector.  A factory worker in the manufacturing sector now has a reference point for comparison and can use that as basis to negotiate his salary upwards.

I also hope to see more sectors adopt progressive wage so that workers in these sectors can also move their salaries up according to what they can contribute at work.

An interesting observation is also that the NTUC, after receiving much flake since GE2011 for being “toothless”, has come out strongly to push the wage increase agenda.  While it does so in its usual measured manner without causing riots or strikes, it has demonstrated that activism is firm actions and not talk.

This is an encouraging sign that the NTUC is flexing its muscle where it should, and bodes well for workers-at-large.  May we continue to see more constructive champions for the vulnerable in our society.

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