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Companies that voluntarily pay progressive wages to be recognised through new mark: Josephine Teo

SINGAPORE — Companies that voluntarily pay progressive wages and provide job progression pathways to their lower-income workers will be recognised with a new Progressive Wage Model (PWM) Mark.

Companies that voluntarily pay progressive wages to be recognised through new mark: Josephine Teo

Manpower Minister Josephine Teo speaking during the second day of the debate on the President's address.

  • Companies that voluntarily pay progressive wages, provide job progression pathways to their lower-income workers will be recognised with a Progressive Wage Model (PWM) Mark
  • This mark will facilitate voluntary adoption by employers in other sectors 
  • Unlike a minimum wage model, PWM raises wages while managing the risk of job losses, said Mrs Teo 
     

SINGAPORE — Companies that voluntarily pay progressive wages and provide job progression pathways to their lower-income workers will be recognised with a new Progressive Wage Model (PWM) Mark. 

Manpower Minister Josephine Teo announced this on Tuesday (Sept 1) on the second day of the parliamentary debate on the President's Address which was delivered by President Halimah Yacob when Parliament reconvened on Aug 24.

The PWM, which started in 2012, is a framework where wages are pegged to skills, productivity and career development. It now covers around 80,000 workers in the cleaning, security, and landscaping sectors.

Mrs Teo said that while it may be “too risky” to mandate the PWM in more sectors right away, the PWM Mark to be rolled out next year will facilitate voluntary adoption by employers that are able to do so. 

Several sectors including food services and retail trade have the potential to come on board, she said. 

When asked how the mark will benefit companies, the Ministry of Manpower said that it allows companies that voluntarily pay progressive wages and provide their workers with job progression pathways to be recognised and rewarded by consumers who support them by buying their products or services. 

"This will, in turn, spur more companies to be progressive as the best way to advance their business interests," the ministry said, adding that more information on the mark will be announced later.

Mrs Teo said: “For the PWM Mark to work, there must, however, be a broader movement involving society at large. As consumers, we must be prepared to pay slightly more and intentionally support such progressive companies by purchasing their products or services." 

PWM IS A UNIQUE MINIMUM WAGE MODEL

Mrs Teo also reiterated the benefits of the PWM over the implementation of a minimum wage, pointing out at the PWM is a “unique” kind of minimum wage policy that uplifts wages while managing the risk of job losses. 

While the Government has not legislated a minimum wage across the board, it has in fact implemented features of a minimum wage through the PWM, she said. 

Mrs Teo added that the Government has also introduced a number of strategies to complement the PWM including the Workfare Income Supplement (WIS), which tops up the salaries of lower-income workers and helps them save for retirement, and the Special Employment Credit which is given to employers to raise the employability of older Singaporeans.

WIS, for example, can comprise up to an extra 30 per cent of the worker's monthly income.

She gave the example of a 60-year-old worker whose employer had been prepared to pay the worker S$1,200 a month.

With SEC and WIS added, the worker earns S$1,593, 33 per cent more than what the employer would be willing to pay, said Mrs Teo.

“Had a national minimum wage been set at $1,600 instead of boosting incomes through SEC and Workfare, would the worker still have a job? Perhaps, if the labour market is very tight but perhaps not when economic conditions take a dive,” she said.

Mrs Teo said that in the last five years, workers in PWM sectors have seen cumulative wage growth of around 30 per cent compared to 21 per cent for workers at the median.

Instead of a minimum wage, Mrs Teo said that the Government’s preferred approach — which is also supported by the labour movement — has four prongs, starting with regularly adjusting the WIS to support employability while ensuring that income inequality continues to be mitigated.

The second prong is to raise wages in PWM sectors at an appropriate pace and the third is to expand PWM over time to more sectors. 

Lastly, Mrs Teo said that the Government will also raise standards of living for lower-income workers by helping them acquire skills to progress and achieve home ownership.

The Government will also provide them access to quality healthcare and education for their children while giving them adequate support during their retirement, she said.

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Josephine Teo Parliament Progressive Wage Model low-wage workers

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