Speech by Minister Dr Tan See Leng at Symposium on In-Work Poverty and the Challenges of Getting By Among the Young by Social Service Research Centre

Dr Tan See Leng, Minister for Manpower, Shaw Foundation Alumni House

Associate Professor Eddie Tong, Co-Director, Social Service Research Centre (SSR),
Associate Professor Irene Ng, Principal Investigator, SSR,
Ladies and Gentlemen,

1. Good morning to all of you. I am glad to join you here at the Social Service Research Centre, or SSR, Symposium today. Today’s Symposium focuses on the research study “In-Work Poverty and the Challenges of Getting By Among the Young”, led by Associate Professor Irene Ng. The study provides valuable insights on the challenges faced by younger lower-wage workers between 21 and 40 years old, in areas such as wages and quality of their jobs and work conditions. I am heartened that SSR has devoted attention to this issue.

2. The Government, with our fellow Singaporeans, is committed to uplift and strengthen support for our lower-wage workers. How can we achieve this? The first and most basic enabler is to keep our economic growth strong. This enables us to generate good jobs and provide opportunities for workers to move up and earn better incomes. At my recent Ministry of Manpower’s Committee of Supply (COS) speech in early March, I have shared with Singaporeans the good news that our labour market had posted strong growth last year.

a. Resident employment is already 4.4% above 2019 levels. Resident unemployment rates have also recovered to pre-COVID levels.
b. Real median income growth was 2.0%, after adjusting for inflation, higher than 0.9% in 2021.

3. However, we are navigating an uncertain global economic environment and facing global inflation and geopolitical challenges, ahead of us. We need to press on with economic transformation to emerge stronger. Workers, especially lower-wage workers, have shared with us their concerns that their jobs may be impacted, and have asked how they can seize new opportunities. I have said this in my MOM COS speech and will say it here again: Rest assured, the Ministry of Manpower will journey with you through these uncertain times ahead, every step of the way.

4. As the focus of today’s Symposium is on the younger lower-wage workers, I will highlight three key areas where we will press on with our efforts to uplift and strengthen support for our lower-wage workers and empower Singaporeans, including the young, to take care of their careers.

Progressive Wage Approach

5. First, we will continue our efforts in implementing the Progressive Wage approach as well as Workfare measures. These are the two key pillars of the Government’s support to uplift wages and provide upskilling and progression pathways for lower-wage workers.

6. Our tripartite journey to uplift lower-wage workers through the Progressive Wage approach started more than ten years ago. The Progressive Wage approach is our unique Singapore tripartite strategy to raise lower-wage workers’ incomes, in tandem with productivity. In this way, workers benefit from a clear career pathway for their wages to rise along with training and improvements in productivity and skills. Employers benefit from their workers’ higher productivity and skills. Service buyers and consumers enjoy better service standards and quality.

7. Over the years, we have rolled out the Progressive Wage Model, or PWM, in various sectors and occupations including Cleaning, Security, Retail and more. We also introduced the local qualifying salary or LQS requirement, whereby all firms that employ foreign workers are required to pay at least the LQS to all their local workers, unless they are covered by a PWM.

8. As highlighted by SMS Zaqy at MOM’s COS Debate this year, 2023 is a milestone year in our journey to uplift our lower-wage workers. We launched the Progressive Wage Mark accreditation scheme for businesses in January and the Food Services PWM and Occupational Progressive Wages for Administrators and Drivers in March. With the introduction of the Waste Management PWM in July, all the recommendations of the Tripartite Workgroup on Lower-Wage Workers will be implemented. The suite of Progressive Wage moves will benefit up to nine in ten full-time lower-wage workers, significantly more than one in ten a few years ago.

Workfare

9. The other key pillar of our support for lower-wage workers is Workfare. Under the Workfare Income Supplement scheme or WIS, eligible lower-wage workers will receive cash and CPF payments to boost their income and retirement savings. MOM regularly reviews WIS and the latest enhancements to WIS have been implemented since January this year.

a. We have increased the maximum WIS payments to up to $4,200 per year, from up to $4,000 previously and the qualifying income cap from $2,300 to $2,500 per month.
b. Recognising the challenges faced by younger lower-wage workers, we have lowered the eligibility age from 35 to 30 years old.
c. With these enhancements, over half a million lower-wage workers will benefit from WIS payments amounting to $1.1 billion, up from $850 million previously.

10. The Workfare Skills Support scheme, or WSS, complements the WIS, by supporting lower-wage workers to upskill to improve their employability and incomes. WSS has been successful in supporting lower-wage workers in achieving a more impactful employment outcome. Thus, from July this year, we will enhance the WSS by lowering the eligibility age from 35 to 30 years old and raising the qualifying monthly income cap from $2,300 to $2,500. With these enhancements, we expect that 70,000 more lower-wage workers will benefit and be eligible for WSS.

11. We also found that workers who achieve Singapore Workforce Skills Qualifications (WSQ) full qualifications, including lower-wage workers, are more likely to earn higher wages. An earlier study showed that on average, WSQ full qualification trainees experienced a real wage premium of 5.8% in the year after training as compared to the control group of trainees. Thus, we will also raise the Training Commitment Award for Full Qualifications from $500 to $800, to encourage lower-wage workers to undertake deeper and more sustained training.

12. Collectively, the Progressive Wage moves and Workfare strengthen support for our lower-wage workers. Last year, the real income of a low-wage worker grew by 4.7%, faster than the median worker at 2.0%. I am glad A/Prof Ng and her team share the same view that these measures will benefit the younger lower-wage workers. We will press on these two fronts to uplift our lower-wage workers.

Strengthening Protection for Platform Workers

13. Second, A/Prof Ng’s research study highlighted the need to improve protection and representation for young workers in platform work, given the precarious nature of their work. We agree and have been working to strengthen protection for Platform Workers.

14. As highlighted by SMS Dr Koh Poh Koon at MOM’s COS Debate this year, we will gradually align CPF contribution rates by Platform Companies and Platform Workers with that of employers and employees respectively over five years, starting from the second half of 2024. This is required for Platform Workers born after 1995, while other Platform Workers can opt in. This will help Platform Workers set aside as much CPF savings for their housing and retirement needs, as employees with similar earnings.

15. Further, to ease the transition, the Government will provide transition support of up to 75% of the additional CPF contributions each year during the phase-in period. This support is for Platform Workers who earn $2,500 or less per month and will taper down gradually over four years.

16. In the fifth year when the CPF contribution rates of Platform Workers are fully aligned with that of employees, we will then permanently increase Workfare payments for eligible Platform Workers to match those for employees. This means that eligible Platform Workers could receive up to $4,200 per year, an increase from $2,800 per year today.

17. Work injury compensation is another salient concern, especially for Platform Workers who are exposed to job risks while being on the road. MOM has set up a Platform Workers Work Injury Compensation Implementation Network, or PWIN to look at how the existing Work Injury Compensation processes for employees can be adapted to provide Platform Workers with the same scope and level of compensation coverage, while accounting for the unique features of platform work.

18. Platform Workers will also be able to seek formal representation and negotiate for their interests with the Platform Companies, like how unions do so for employees. This will create a more balanced relationship between Platform Workers and Platform Companies to help resolve some of the workplace issues raised by Platform Workers, such as working conditions, safety at work and timely dispute resolution with customers.

19. With these efforts underway, we hope Platform Workers will feel more assured and supported. Nonetheless, we understand that not all Platform Workers see this as their permanent jobs for the long term. Some may be doing this temporarily as they search for full-time employment opportunities. So our measures are catered to as broad a spectrum of Platform Workers as possible.

Forward Singapore Empower Conversations

20. With the global economy changing rapidly, workers in full-time employment may also feel worried about their jobs. In fact, A/Prof Ng’s research found that larger proportions of the lower-educated young workers worried about losing their jobs a great deal, as compared to the higher-educated young workers. Under the Empower Pillar of the Forward Singapore Exercise, MOM and NTUC have been engaging with Singaporeans from all walks of life to understand their aspirations and concerns about the economy and jobs. In fact, on Saturday (25 Mar), at the closing of the Citizens’ Panel where DPM Wong gave a speech, there were some interesting insights that we have gained, and we hope to be able to tweak and adapt some of these proposals in our final report. Many Singaporeans whom I spoke with aspire to improve their prospects at every stage of their career.

21. We will thus empower and support Singaporeans to take charge of their careers and improve their career health. A/Prof Ng’s research highlighted that lower-educated young workers, due to their age and level of educational qualifications, might be doubly disadvantaged in terms of their wages, occupation types and working conditions.

22. We empathise and recognise the challenges faced by these workers. For young workers who are starting out or in the middle of their careers, I strongly encourage you to persist in training to upskill or reskill themselves and not to give up. Training is a key enabler to find good jobs and move up in their careers, which will in turn offer higher wages and better work prospects and conditions. Through SkillsFuture, the Government has invested heavily in equipping Singaporeans with new skillsets for the future and will continue to do so.

23. However, we must empower Singaporeans to identify the right jobs and skills that are in need in our ever-changing economy and keep abreast by undertaking the relevant training. MOM is thus working to help Singaporeans gain better awareness on their career health and prospects. As we progressively rolled out Industry Transformation Maps, or ITMs, for 23 sectors since 2016 to address emerging trends and opportunities and chart their transformation journey, we also introduced the Jobs Transformation Maps or JTMs in 2021. The JTMs provide detailed insights on the impact of technology and automation on jobs in each sector over the medium term. This will empower Singaporeans to better prepare themselves for future jobs and skills. To date, ten JTMs have been completed, with eight additional JTMs in progress.

24. Workforce Singapore (WSG) and NTUC’s Employment and Employability Institute (e2i) also offer a suite of employment advisory and guidance programmes and services. Besides the career advisory and guidance services provided by WSG’s Careers Connect and e2i, we are also launching a new CareersFinder feature on the MyCareersFuture portal in the third quarter of 2023. This feature will tap on data and artificial intelligence to help jobseekers identify potential career opportunities based on their individual profiles, and suitable training programmes to achieve their career aspirations.

25. With better awareness, we want to support Singaporeans in taking purposeful and intentional steps to improve and maintain their career health. For our young Singaporeans, there is a suite of initiatives and programmes to provide good job opportunities to meet their diverse interests and aspirations, for example:

a. In September 2021, MOM has set up the Jobs Taskforce to help more locals enter new jobs in ten key sectors, such as Information and Communications and Manufacturing. To date, we helped place more than 11,000 locals into new jobs in these sectors.
b. Besides the Workfare Skills Support Scheme that support lower-wage workers to upskill, Workforce Singapore also offers many Career Conversion Programmes, or in short, CCPs, that provide salary and training support for employers who are prepared to hire and train mid-career workers for new job roles.
c. NTUC’s Company Training Committee Grant, or in short CTC Grant, co-funds companies’ proposals to redesign jobs and transform business processes to raise productivity, which will lead to better career prospects and better wages for our workers.
d. Programmes such as the Singapore Global Executive Programme and Global Ready Talent Programme support our young talent to pursue structured career progression pathways in high-growth companies or take on local and overseas internships.

26. Besides supporting workers to upskill and reskill, we also want to build a more inclusive labour market that rewards mastery of skills in different areas, with multiple pathways to success. We are partnering NTUC to look at how we can redesign skilled trades to offer better salaries and clearer career and skill progression ladders. We will share more details when the Forward Singapore Exercise concludes.

Conclusion

27. Efforts to uplift our lower-wage workers require the support from the whole of our society, not just the Government and Tripartite partners alone. We look forward to having more conversations and working with all of you to create an inclusive society, with abundant opportunities brimming with hope and optimism for all. We will continue to work hard and make more moves under Forward Singapore to support our workers and businesses. I believe SSR’s research and recommendations will also enrich the ongoing discussions on ways to further uplift our lower-wage workers and empower our young workers to seize new opportunities and progress in their careers. I wish all of you a fruitful discussion later at the Symposium. Thank you.