Zainal Sapari to Parliament: Let’s be realistic about vulnerable workers.

Summary: Five improvements to low-wage worker policies performed by the labour movement and three ways to improve it further.

“We must not fool ourselves to think that as a society, we are doing enough in being fair to all our workers. While there are policies in place today to help our low-wage workers, many of them are still being taken advantage of. They struggle to make ends meet, let alone save for retirement, no matter how hard they work”, said the labour MP.

The effort of the entire Labour Movement; NTUC, Unions and affiliated associations, to help low-wage workers had largely paid off. This had manifested itself as better policies to better support and protect worker’s wages and employment rights.

Some of these include:

  • The Progressive Wage Model: an initiative to help raise the wages of low-wage workers, especially in the cleaning, security and landscaping industries.
  • Recommendations for built-in wage increases for low-wage workers, this ensures real wages are not eroded by inflation or “down-waging” when contracts are renewed.
  • Workfare Income Supplement had created opportunities for low-wage workers to bring home higher salaries
  • Workfare Training Scheme had created better opportunities for upgrading their skills and opening better prospects
  • Amendments to the Employment Act have now enforced the need to issue pay slips and employment contracts; once a means of exploiting the vulnerable worker

The sad reality is that many of the lowest paying jobs in our country are held by elderly workers with little education and limited skills.

Zainal Sapari

“During our engagement with our union leaders to arrow-in on the plight of low-wage workers, the issue of ensuring workers retirement adequacy, especially for low-wage workers, stood out prominently”, said the unionist.

Moving ahead, what else can we do? Zainal suggested three measures:

Firstly, it is suggested that there be a CPF Review Committee be setup to review employer’s CPF contributions for older workers. At present, employer’s CPF contribution rate decreases progressively after a worker reaches 55 years of age.

The existing wage band structure was introduced in 1988 with good intentions to ensure companies could remain competitive. However, there is no good reason why older workers today should have reduced employer’s CPF contribution. This is especially so when companies have moved away from a “seniority-based wage structure”, which means they get paid more as they age.

Secondly, a mandatory Annual Wage Supplement was called for by union leaders. Many assume that the entire workforce gets a 13-month bonus, but this is not true. If AWS was required, it could bring about an increase of 8.3 percent of salaries amongst low-wage workers, thus reducing the income gap.

Finally, more work needs to be done in reducing medical costs. At present, the Employment Act only requires employers to pay for the medical consultation fees when a worker sees a doctor for outpatient treatment. There is no requirement today for employers to pay for employee’s medication costs. Union leaders suggest that it be mandatory to include better medical coverage for workers, by making employers pay for non-chronic outpatient treatment at polyclinics.

Such a program does not need to be necessarily at expense of the company. In this Budget, the Government is providing a lot of support for companies through various schemes and grants. To make it win-win for employers and employees, ministries might consider using grants as a leverage to incentives companies to care more for their workers, especially the low-wage workers.

To follow the blog posts that cover the work of the labour movement in the area of low wage workers, you may follow the Facebook page of Zainal Sapari here.

About the author

Tay Leong Tan

Tay Leong Tan is a collective of 3 writers. Tay, Leong and Tan. (Who were you expecting?!) We are enthusiastic about labour issues, economics and current affairs in particular.

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