The Business Times

Lower-wage workers' faster-than-median wage growth not to be taken for granted: Zaqy Mohamad

Published Tue, Jul 6, 2021 · 02:41 PM

WHILE real wage growth at the 20th percentile of the population has outpaced that of the median worker's, such progress should not be taken for granted, said Senior Minister of State for Manpower Zaqy Mohamad in Parliament on Tuesday.

"While we see robust real income growth for them, this is not the case for most OECD countries," he said in response to questions raised by Member of Parliament Cheng Li Hui on how the wage growth for those in the bottom 20 per cent compared to median wage growth in Singapore and that of the bottom 20 per cent in OECD countries.

For example, workers at the 20th percentile in the UK saw no real wage growth, while those in Japan and US saw only cumulative real wage growth of 3 per cent and 6 per cent respectively over the same 10-year period, Mr Zaqy said, adding that such progress is not "inevitable".

Recognising the impact of the pandemic on low-wage workers, Mr Zaqy also said that new recommendations would be announced by the Tripartite Workgroup on Lower-Wage Workers in the coming months.

Plans to expand the model to other lower-wage occupations that straddle multiple sectors are also underway, said Mr Zaqy.

Currently, the Progressive Wage Model benefits some 85,000 workers in the cleaning, security and landscaping sectors. The model will, in future, expand to cover sectors such as food services, retail and waste management and benefit up to 218,000 workers.

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However, Mr Zaqy highlighted that such a move towards better wages is not the effort of the government alone. He said employers have to drive productivity improvements in their companies through better technology and processes, as well as explore new business models or services to value-add to their customers.

Support from service buyers is also needed in embracing outcome-based contracting and contract durations that encourage investment in new technology, he added.

While the model provides job and training progression pathways for lower-wage workers to grow their wages and improve productivity, Mr Zaqy said the latter is a result of workers and companies working together to grow the business and fairly distribute the fruits of the growth.

"Indeed, if we as a society would like to see our lower-wage workers make good progress sustainably, all of us have a role to play."

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