Myths about the Progressive Wage Model

 

1. Operators don’t want to promote staff, preferring to keep them at low ranks

Productivity is a key component of the Progressive Wage Model. It drives wage increases through real gains to the company. If you are a staff working productively, progression follows naturally. The model also encourages companies to move their workers up the wage ladder.

It is important not to underestimate the importance of productivity.

Without productivity gains, a company cannot pay higher wages. No profit = no gains. Companies then have even more reason to keep wage low and workers in routine jobs.

By encouraging workers to peg wages to corporate returns, staff have greater chances of, not just wages increase, but also a chance to take on more responsibility that boosts confidence and morale.

 

2. It is a “normal job progression model”

To a normal waged worker, moving through the ranks is taken for granted. To someone like a cleaner for example, this may not be the case. Consider the job of your local cleaning auntie. She starts and ends everyday doing the same thing over and over again. By making her employer design a progression ladder, she now has the choice of taking on new responsibilities (such as operating special machines, specialised cleaning or supervisory roles).

She is now empowered.

 

3. It doesn’t help mid to high wage earners

When salary at the lower rungs move up, the other tiers will then consider the competitiveness of their salaries too. Across the nation, jobs have to be redesigned to allow for higher wages. This will help in revitalising the manpower landscape in Singapore, enabling Singaporeans to earn better wages. And these are not short term, unstable gains – because of the relationship to productivity, companies can afford to make these increments.

 

4. It pays too little/ not enough

Conclusive studies on living wages are still in progress by various agencies, so are the effects of implementation. Meanwhile unions continue the upward pressure on the base pay.

 

5. It is/is not minimum wage

I believe this type of argument is irrelevant – minimum wage exists as a variety of species and different countries implement it differently. Instead of being caught in decision limbo, it is important to take the step in helping wages of low waged workers to lift.

 

The PWM is not one singular policy alone. Is is a total package of mechanisms which include:

  • Skills: Sharpening the skills of the workers and equipping them with new knowledge they can use across different employers
  • Productivity: Giving reasons to employers to share gains and increase wages. This important component helps prevents zero gain payments
  • Wages: The legislated base wages are a great help, but it is not all. The progressive wages that follow an employee’s career is the more exciting bit that neutralises some of the negative effects of a national minimum wage program.
  • Government incentives: WorkFare, Inclusive Growth Programe, together with various other productivity and wage oriented packages help soothe the labour transitions companies face. The IGP is a financial program designed to encourage companies to harness the use of technology to create better jobs. These funds are given on the condition wages in a company improves.
  • Union lobbying: The traditional work of unions is to do negotiate for labour. With the introduction of PWM, unions now have the duty to also educate the customers of businesses. Perhaps price would have to increase because of these efforts and in some situations, this can be tricky. Take for example contract clients who have signed a fixed price for service. With price increases, they have to understand where productivity gains are coming from.

 

About the author

Benjamin Chiang

Benjamin Chiang is an enthusiast of good advertising, deep thinking, labour issues and chocolate. He writes also at www.rangosteen.com and occasionally on Yahoo!

The views expressed are his own.

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