Appreciating work value equitably

THIS WEEK'S TOPIC: To help uplift Singapore's lower-wage workers, does the progressive wage model (PWM) need to be supplemented by perhaps a minimum wage?

Victor Mills Chief Executive Singapore International Chamber of Commerce

A minimum wage would certainly help but it is not nearly enough. What is needed is an entirely different approach to how we view jobs. For far too long, office or white-collar jobs have attracted remuneration far above the value of many such jobs to society. This has depressed the status and perceived value of jobs essential to the functioning of any society. The pandemic continues to demonstrate the proof of this contention. We say we want a more equal society. We have to be prepared to pay for it to attract more people to the jobs which society needs.

Lawrence Loh Director, Centre for Governance and Sustainability NUS Business School

There are merits in the "vertical" approach of the progressive wage model (PWM) - it's focused and can go deep in addressing the total set of issues beyond just wages in itself. But there are many sectors and it will take a long time to cater to all workers one sector at a time. The "horizontal" approach of a minimum wage across the board will accelerate the rate of reaching out to all deserving workers. Time is of the essence now, especially in the pandemic transition. The dual vertical-horizontal mode will be a complete way to holistically address the specific issue of wage level, and more broadly, worker development in a phased manner.

John Bittleston Founder and Chair Terrific Mentors International Pte Ltd

Yes, please. Our aim must always be to level up, not level down. A sensible minimum hourly wage rate has been shown to do that in other societies. We are a special society and we employ many foreign workers who typically receive lower wages. The minimum wage we have for Singapore employees should be reflected in the minimum wage we pay overseas workers. It may take five years to bring the two minimum wages into line but that must be the objective.

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Marcus Lam Executive Chairman PwC Singapore

While a minimum wage in and of itself may not do much to address income inequality, its value lies in being a psychological marker of societal worth. There may come a time when this psychological marker may need to be hard-coded as legislated minimum wages, which by itself is a fairly blunt tool. In the immediate term, we can already raise responsible ownership and inclusive leadership in employers as part of the wider environmental, social, and governance movement. This will entail creating a culture of respect for the entire diverse range of jobs and skills that play a crucial role in enabling society to be fully functional. This should also come with a wider recognition of individuals' contribution to society from taking on any honest trade.

Eileen Chua Managing Director SAP Singapore

As Singapore progresses, workers of all skill levels are important to build a successful and productive economy. Besides the PWM and regulations to protect lower-wage workers, public and private organisations need to continue their partnerships to reskill, train, and upskill their workforce to help companies adapt, change and think innovatively to corner new markets. Minimum wage is the first step towards elevating industry transformation and reducing inequality. In the long run, focusing on diversifying and enhancing lower-wage workers' skill sets will be the key to their long-term job and income progression. Only by providing salary security can workers further bolster their capabilities in tomorrow's skills-based economy.

Dileep Nair Independent Director Thakral Corporation Limited

A minimum wage has little impact on inequality. But it signifies a moral stand on the minimum a worker should be paid for his labour - something every developed society should take. The PWM does set a minimum wage - but only in specific sectors. Since its introduction in 2012, only three industries have a PWM. This covers barely 15 per cent of low-wage workers. Extending the PWM to other sectors takes time because of its complex structure and the need for consultation and negotiation. Given the relative simplicity of a minimum wage, twinning it with the PWM is sensible. Fears that a minimum wage results in rising costs to consumers and loss of competitiveness are overblown, given that wages make up 40 per cent of our gross domestic product (GDP), compared to over 50 per cent in most developed economies. Certainly, implementation will need some careful study, but I'll echo MAS chief Ravi Menon in saying "If any country can do it, Singapore can".

Mario Singh Chief Executive Officer Fullerton Markets

Yes, I believe it is time for the government to seriously consider minimum wage. Two reasons: Firstly, the PMW is currently limited to the cleaning, security and landscape sectors which account for only about 15 per cent of low-wage workers. What about workers in other low-wage sectors like retail or plant and machinery? Secondly, as much as the PWM is based on upgrading of skills, there's only so many skills required to keep an area clean or a place safe.

We don't need to look further than the pandemic to realise the huge role our lower-wage workers play with regard to the collective health and safety of our entire population.

Granted, there are challenges that need to be resolved before this becomes actual policy, but the goal remains that the purpose of a minimum wage is simply to raise the wages of those at the bottom of the income distribution.

Jeffery Tan Group General Counsel and Chief Sustainability Officer Jardine Cycle & Carriage

To respond to this question, there's a need to first reframe our perspective on wages, by asking the following: Is the issue one of "lower-wage" roles or the value we assign to them?

Are we prepared to accept the universality of a fair "base price" to pay for labour and services in a community - instead of merely treating some roles as "lower-wage" jobs that we are unwilling to pay fair value for, referencing the ability to access such services from available foreign labour, for which we have become accustomed to paying low wages? To ask ourselves if the services of a plumber (or any "lower-wage" roles) are less important than, say, a doctor, lawyer or digital software professional? We hire the latter individuals, relying on their expertise, which we lack. In the same way, we hire a plumber to repair a leaking pipe, as we lack the expertise. Should we not adopt a similar approach in fairly compensating the plumber as we do the others?

Seah Kian Peng Group CEO FairPrice Group

Addressing the complex issue of wages requires a holistic approach including parties from all sides of the spectrum. First and foremost, companies must find ways to upskill workers, whether through job redesign or better training programmes, to increase the value they provide to their customers. Customers, in return, should be prepared to pay more for the product and/or services from better-trained workers. Workers, too, may have to be open to de-prioritising non-wage components over wages in the short term, though companies should leverage various government subsidies in place to aid in this transition.

This is an ongoing journey that will require a concerted effort and open communication by all stakeholders. Through the PWM, both companies and workers stand to benefit as it yields better returns in the long term while generating better value to customers - resulting in a win-win for all.

Maren Schweizer Chief Executive Officer Schweizer World Group

Policymakers and corporates should continue to focus on ways to help workers raise their skills to command higher wages and climb the employment ladder, using lower-wage jobs as a starting point. Work-based learning programmes have been shown to effectively raise wages, in part because employers determine the skills people learn. Economists agree on subsidies during upskilling that directly target the working poor being better than a minimum wage. Furthermore, we have to ensure equal working conditions of the primary sector with high-skilled workers and the secondary sector with lower-skilled talents.

The best employment programme is a hot, competitive and forward-looking economy, such as ours in Singapore.

David Jacob Chief Executive Officer Marsh Asia

The pandemic has laid bare the many disparities in wage, healthcare, education, technology and economic prospects. Such disparities are exacerbated by an ageing workforce, skills obsolescence and non-communicable conditions. Against this backdrop, we need to look at worker compensation in a more holistic manner. Beyond wage supplements, companies can embrace inclusive healthcare benefits, especially with medical costs in Asia outstripping the pace of inflation by 7.5 times. Automation makes workforce training even more essential to ensure that workers are up to speed with the current pace of digitalisation, which enhances their agility, productivity and competitiveness. This approach will create a favourable brand reputation and competitive advantage in the war for talent and enable a more equitable distribution of resources.

Ho Kai Weng Chief Executive General Insurance Association of Singapore (GIA)

Lower-wage workers' wages are still disproportionately low. The PWM is only for a few sectors and has moved slowly. There are far more jobs (3.6 million) than the resident workforce (2.3 million). Wages at the lower levels can and should adjust upwards, and the costs shared by the employers and customers, as is the case at the median and higher wage levels. A minimum wage will help us get there.

Chia Ngiang Hong President Real Estate Developers' Association of Singapore (REDAS)

The PWM specifies an income and skills ladder and is effectively a sectoral minimum wage model, premised on raising productivity and offering a career pathway where wages are pegged to training and productivity improvements, thus enabling workers to stay employed, enjoy upgrading and regular guaranteed wage increases. The government has plans to expand the PWMs to many more sectors. I do not think we need a minimum wage to complement the PWM as the model already incorporates that criterion, taking into consideration the prevailing market factors. Moreover, wage range among the various sectors are very varied, depending on the type of jobs, and it may cause misunderstanding among workers to demand a comparable minimum.

David Kuo Co-founder The Smart Investor

The PWM currently covers three sectors, helping to protect some of the most vulnerable in society. But we need to be careful when considering overlaying a minimum wage model onto a PWM. It could have unintended consequences. We need to consider that not everyone wants to work for a stipend. There are some in our society who would like to offer their services and also share their expertise for little or even no pay. That might not be possible under the constraints of a minimum wage. It might even be illegal. Ironically, these people are not taking jobs away from the lower-paid but could even be creating more better-paid jobs for more people.

Chia Tek Yew Vice-Chairman, Singapore Oliver Wyman

As a business leader, I would like to believe that the PWM, implemented on a sector basis, is a good economic option. Over time, if it is applied to all low-wage employees, we should then achieve a national minimum wage in any case. But this will take time and is dependent also on productivity gains.

As a human being, however, I believe that all of us should have the right to earn a "living wage", regardless of our capabilities/productivity or sector we work in. This essentially should be the responsibility of the state and in Singapore, this burden is shared with employers to ensure that all who work are paid an equitable wage. Where there is a gap, the PWM is now used to bridge that gap.

During this pandemic, it's obvious that many of our low-wage employees play a very important role in keeping the country clean, green and safe and deserve to be paid fairly and properly. It's time to consider implementing a minimum wage to supplement the PWM, with the government providing grants/tax incentives to help businesses transition. An equitable model for low-wage employees will see them earning a living wage now which can then be progressively increased with productivity gains over time.

Seamus Phan Chief Content and Technology Officer McGallen & Bolden

Unfortunately, the dialogue seems to focus on the wrong areas. Rather than looking at how low wages are, or what skills workers must learn, why not ask what are livable wages and what societal value a job brings? For example, Australia has an enlightened wage model of paying workers equitably. A typical street sweeper may earn A$67,000 a year, while a bus driver may earn A$60,000 a year. This ensures livable wages and social cohesiveness, comparing favourably with other vocations such as a secretary working in an office for A$75,000 a year. Singapore needs to gear up for livable wages, rather than debating on minimal wages or re-skilling or "pivoting".

Lim Soon Hock Managing Director PLAN-B ICAG

A progressive and First World country cannot leave its low-wage workers behind. Inclusiveness is a good enough reason to move to a minimum wage model, taking precedence over the value of a job. For this to work, the 3Ps - public, private, and people sectors - must accept this reasonable trade-off, remain open, collaborate, and do not give up to find solutions to the problems which such a model would create. For example, the average wage level would rise, businesses may pass on the higher costs to consumers, who must be prepared to live with higher inflation.

The PWM must be an integral part of this larger national minimum wage scheme to ensure that everyone can upskill to earn fair, if not higher, wages. The issue of minimum wage is complex. Efforts to resolve it must be doubled down to ensure that our lower-wage workers are not left behind to the detriment of social cohesion and harmony.

Annie Yap Executive Chairman and Founder The AYP Group

The PWM would definitely be more effective if supplemented by a minimum wage. Firstly, firms have the responsibility of ensuring that their workers have a sufficient wage to live on. It is an important step in protecting workers from unduly low pay rates. A minimum wage could also help to stimulate the economy. Phasing in a minimum wage would boost consumer spending, and in turn, economic growth. This would be beneficial in helping the nation recover from both the public health and economic crisis at a faster pace. Not only would a minimum wage help ensurea basic standard of living for Singapore citizens, it would be beneficial to the economy as well.

Zaheer K Merchant Director, Corporate Affairs QI Group of Companies

Singapore has no "minimum wage" regulations except, since 2016, for cleaners, security guards and landscape workers. Considering Singapore's per capita GDP of around US$60,000, it's slightly awry that we cannot wrap our minds around a minimum wage. The PWM does require "help" for real progress and inclusivity. Even one simple offset like a small tax benefit to entities hiring low-wage workers will ensure more even wage distribution. If we pride ourselves on impressive statistics while being effectively a First World country, we should at least be able to implement a minimum wage for the lower-income rungs in Singapore society.

David Leong Managing Director PeopleWorldwide Consulting Pte Ltd

Minimum wage has been a highly sensitive topic because it impacts overall costs, particularly labour cost. The minimum wage cannot be differentially applied as it'll cover both Singaporeans and foreigners alike. Differential and selective application of minimum wage can be seen as discriminatory.

The PWM is the most ideal as it is targeted and the government can expedite the process of creating multiple PWMs across industries. Singaporeans in those roles can be immediately uplifted and can benefit with career improvement through greater skills and professional upgrading. Best of all, it is not just a minimum wage. It is a career with prospect of a better future with a career ladder to climb.

Sujith Sivaram Managing Director ESCO

I am sceptical about the effectiveness of a minimum wage as a sustainable long-term measure to support our low-wage workers, as it might eventually result in higher costs that businesses would pass on to consumers. What low-wage workers need is support in meeting their basic needs with their earnings. In my opinion, our support measures should focus on helping them with basic needs by making available lower-cost alternatives for food, clothing, shelter, education, and health services. Such support measures would shield them from the stress of rising costs or economic uncertainty. We should review the current support measures and take steps to make effective changes, to ensure at least a basic standard of living for all. The PWM would continue to encourage the workers to upskill and upgrade their standards of living and we should also support these efforts more generously. Employers can be encouraged to provide additional support to their lower- wage workers through tax or other rebates.

Srihari Sikhakollu Chief Executive Officer eRemit Singapore

As the migrant community makes up the bulk of Singapore's lower-wage workers, it is important to acknowledge the difficult circumstances they face. They must constantly worry about making ends meet for their families back home while working in onerous manual labour jobs. Thus, implementing a minimum wage on top of the PWM would go a long way in reducing the weight on their shoulders.

Additionally, more can be done by the government and enterprises to enhance the living standards of lower-wage workers, by ensuring accessible healthcare and improving financial literacy for better money management.