Progressive wages should promote productivity, career progression: MOM, SNEF

EVEN as businesses raise wages under the progressive wage models (PWMs), they should also increase employee productivity to make the higher costs sustainable and justifiable – this point was made separately by Senior Minister of State for Manpower Zaqy Mohamad and by Singapore National Employers Federation (SNEF) vice-president Tan Hee Teck at a dialogue session on progressive wage moves.

Speaking at the event on Wednesday (Nov 16), Zaqy said that, rather than give a “free wage rise”, businesses can consider building on their employees’ skills and redeploying them to tap their talents and skills.

Sector-specific PWMs, developed by committees made up of representatives of the unions, employers and the government, specify minimum wage levels and seek to uplift the wages of lower-wage local workers by putting them through training to raise their skills and their productivity. The PWM for the retail sector took effect in September; a food-services PWM and waste-management PWM will be introduced in March and July 2023 respectively.

The dialogue on Wednesday brought together some 100 employers, consisting of C-suite executives and human resource managers from sectors such as food and beverage, hospitality and retail. They raised concerns about government support, administrative compliance, job redesign and foreign labour.

Attendees noted that employees may be satisfied with their current salaries for the work they do – and their employers are happy to pay them that – but these salaries are below the minimum wages required by the PWM.

Zaqy responded that the median income is continuing to rise, and although employees may be content in the short term, social inequality will worsen in the long term if the salaries of lower-wage workers remain stagnant. Raising their wages “is not going to break the company’s bank,” he added.

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He also noted that foreign workers are still available to balance out wage moves for locals, but cautioned that a dependence on them is not sustainable. This is because the wage levels elsewhere are progressing and those job markets are becoming able to provide opportunities for their own citizens.

Acknowledging the challenges raised by business leaders and managers of outsource companies, which may have higher proportions of lower-wage workers, he encouraged them to rethink their business models; companies in the security sector, for example, can lower their reliance on manpower by adopting surveillance technology.

Another issue raised by participants in the dialogue was the difficulty in compliance resulting from the differences in the way work hours are calculated by businesses and under the PWMs. And some businesses (the food-and-beverage sector, for example) find it difficult to qualify for wage credit support due to the short-term, temporary nature of the jobs they offer.

The tripartite partners, namely the unions, employers and government, have taken some of these issues on board and will look into tackling them.

Singaporeans sometimes question the low wages for jobs such as hawkers or cleaners, but want things to stay “cheap and good”, said Zaqy. Low-wage workers play important roles, but then, businesses are also facing rising costs and a struggling economy.

“So that’s one aspect we have to think about: the social compact between community, society, businesses and of course, the workers.”