Yesterday, WP leader Pritam Singh brought up the issue of implementing a Universal minimum wage (UMW) of $1300 in Singapore instead of having the current Progressive Wage Model (PWM). This has created somewhat of a hoo-ha in Singapore, with many Singaporeans surprisingly, offering differing views to his suggestion.
What is Universal Minimum Wage?
UMW is the basic wage that all employees MUST pay employees if it is implemented. It does not matter which industry or what job the worker does, ALL lower wage workers MUST at least be paid this amount if not more.
Do take note that WP’s suggestion of $1300 is the “take-home pay”, which means that the amount before deducting CPF is $1625. (Yes, means boss must pay each worker at least $1625)
Then what about Progressive Wage Model?
PWM is like a “ladder”, that is currently introduced in three sectors – cleaning, security and landscape. The “ladder” model means that the increment in pay is tied to productivity. Workers can attend training to gain more skills and be promoted to more senior roles, which raises their pay.
So what’s the big hoo-ha and what are Singaporeans saying?
Let’s look at some main arguments against UMW presented by netizens, are they true?
- Some industries with PWM are already offering higher pay than UWM.
This claim is true.
As seen from the following snapshots which are taken from the MOM website (links are below), all three industries that have implemented PWM are actually paying the majority of their workers above $1300.
The cleaning industry starts off a little lower than $1300 at $1236 but the same worker will soon exceed $1300 after a promotion to the next tier.
In my opinion, this is better than having everyone being paid $1300 as more workers get the opportunity to attend training, upskill and earn above $1300 after promotion.
- UMW may become the “max pay” that employers are willing to pay rather than “minimum pay” as intended.
This claim could also very well be true.
In order for UMW to be implemented across Singapore, it has to be legislated by law, which means that it would become illegal for any employer to pay any full-time employee below $1300.
This could result in a few outcomes –
- Employers hire fewer employees to save on costs
- Employers are more resistant to promote staff and increase pay since they are already paying the “minimum required”
- Employers replace employees with lower level skills with automation
This could cause UMW to become the “max pay” that employers are willing to pay and hence have the opposite intended effect. This could be due to the fact that UMW is not progressive and is not tied to productivity or skills. For PWM, workers have to “work for their pay rise”, but it is also more fair and employers would be more willing to pay for workers who undertake more job responsibilities.
When workers are motivated to upskill to earn their promotion, it also benefits them, because the skills gained make them more relevant in the workforce and less prone to being retrenched.
- If UMW is implemented for Singaporeans, does that mean that I must pay my helper $1300/month too?
This claim is untrue at the moment.
Singapore is a member of the International Labour Organization (ILO), which recommends countries that have UMW to also implement UMW across all employees, including foreign domestic workers.
However, at the present moment, Singapore has not ratified (formally or contractually agree to) the convention on UMW. Hence, we are not held to it.
However, this stance could change if Singapore enters a formal agreement with ILO to implement UMW across all employees in future.
So now what?
I personally think that PWM is a better model for most workers because it promotes the need for training and upskilling, which helps workers not stagnate and become redundant in the workforce. The key thing now is to encourage more sectors and industries to implement it, and quickly, so that more workers can benefit from it!
Let’s hope the Govt will listen to the feedback and swiftly implement PWM more widely to benefit more Singaporeans!
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