Progressive wage model should be expanded at quicker pace: Koh Poh Koon

THE progressive wage model (PWM) should be expanded at a quicker pace and made universal to cover all sectors, said Koh Poh Koon, NTUC deputy secretary-general, in Parliament on Tuesday, adding that sectoral benchmarking could be explored in some sectors as a first step.

The PWM is currently mandated in the cleaning, security and landscape sectors and has helped substantially raise the wages of workers in these sectors by around 30 per cent between 2013 and 2018.

But these three sectors account for only about 78,000 workers, representing just 15 per cent of all the workers in the lowest 20th percentile of salary ranges, said Dr Koh, who is also Senior Minister of State, Ministry of Health and Member of Parliament for Tampines GRC.

"Understandably, it is not the best time to raise wages during a global health and economic crisis when businesses are facing challenges of cash flow and disruption," said Dr Koh. "(But) if we truly want to build a more inclusive society and narrow the income gap, the pace of PWM implementation across more sectors must quicken."

Meanwhile, sectoral wage benchmarking could be a first step towards eventually being made universal.

"Companies must find a way to translate the increased productivity into tangible benefits for our essential service workers, many of whom are in the low-wage segment, so that they can see how industry transformation will benefit them," said Dr Koh.

"(The) government must also be prepared to use more regulatory levers to widely implement PWM. Clearly, waiting for the market to move on its own will not produce results," he added.

Setting a sectoral wage benchmark can be done through leveraging various data sources, such as the occupational wage survey. In sectors with a more variegated employment landscape such as food services and retail, sectoral wage benchmarks may help catalyse more companies to embark on uplifting the livelihoods of low-wage workers, Dr Koh said.

He added that the lifts & escalator sector PWM will become mandatory in 2022; the labour movement is still in discussions with stakeholders to see how the PWM can be implemented for the waste-management sector.

Separately, Dr Koh also stressed the importance of strengthening the Workfare Income Supplement (WIS) scheme.

The WIS scheme was recently enhanced, with the qualifying income raised to S$2,300 per month and the maximum payout increased to S$4,000 per year. Today, WIS contributes to almost one-third of the take-home wages for low-wage workers.

Dr Koh noted that the National Wages Council (NWC) will reconvene again later this year to review the wage guidelines.

"I hope during this review, the NWC will continue to protect the wage of our low-wage workers and recognise their contributions in the essential services," he said.