Speech by SMS Zaqy Mohamad at Uplifting Lower-Wage Workers through Tripartism

Senior Minister of State Zaqy Mohamad, Furama City Centre

DSG Desmond Tan, Mr Felix Loh

Past and Present Members of the National Wages Council

Members of the Tripartite Workgroup on Lower-Wage Workers

and Tripartite Cluster Members

Brothers and Sisters

Ladies and Gentlemen

• A warm welcome to all of you to the 10^th anniversary of the Progressive Wage Model.
• We gather here today to commemorate a significant milestone in Singapore’s efforts to uplift lower-wage workers – and we celebrate the 10^th anniversary of the Progressive Wage Model.
• Since Independence, Singapore has developed its economy rapidly and as the economy grew, Singaporeans saw incomes grow as well – and quality of lives improved over the decades.
• As our economy diversified and developed into an international hub, global trends and industry growth trajectories meant that the nature of jobs and salaries grew at different pace.
  1. For example, some workers saw wages rise quicker in the knowledge economy; more recently STEM jobs saw strong demand.
  2. However, we also saw several sectors serving the domestic market not keeping up with productivity growth, and workers’ wages stagnate.
  3. If unmanaged, income inequality could become social inequality, as we have seen in countries with social stratification. And that’s not something we will want to see here in Singapore. 
• Many countries grapple with the issue of uplifting lower-wage workers. They adopt different models like minimum wage, and see mixed results.
• In Singapore, our model of tripartism has shown that it can and will continue to find innovative solutions such as the Workfare, PWM and LQS, to protect our lower-wage workers.
  1. This is the heart of what we do, supported by our labour movement, employers and the Government.
  2. This must be our social compact – that everyone has the opportunity to make a good living as long as they work hard, and all of us do our part to support those who need a leg up.
  3. And as Singapore prospers, our workers should progress and no one gets left behind.
  4. To borrow NTUC’s slogan, “every worker matters”.
  5. I have had many opportunities to visit and speak to cleaners, security officers, a other workers.
  6. Many, especially those among our Pioneer and Merdeka generations, were not able to pursue higher education or a meaningfulcareer, as they had other life responsibilities.
  7. But they possess the same determination to do well; they are keen to learn new skills; and they work hard to forge a better future for their families.
  8. This is why we must take care of them.
• I am honoured to be with you today, to reflect on our journey and shared vision for the future.

Commemorating 10 Years of PWM

• The PWM is the fruit of hard work of many pioneers in the labour movement and industry leaders. Many of you are sitting here in this room and you recall the years on this journey that we’ve gone through.
  1. In 2012, due to outsourcing and competition for contracts, we found cleaners’ wages stagnating.
  2. NTUC conceptualised the first PWM for Cleaning.
  3. Then-Sec Gen Mr Lim Swee Say championed the idea of a wage ladder that would correspond to workers’ skills, productivity and job responsibilities.
  4. Brother Stephen Lee, who was President of SNEF then, had ardently supported this idea.
  5. It was innovative, bold; we did not have a template to follow.
  6. We formed a tripartite committee, led by Brother Heng Chee How and Brother Lup Wai.
  7. And as a team, partners came together to make it happen.
  8. In 2014, the Cleaning PWM became mandatory.
  9. With more confidence, we introduced PWM where similar outsourcing practices were common – in Security, Landscape Maintenance, and Lift and Escalator Maintenance sectors as well.
  10. Brother John, Sister Peggy, Brother Zainal, Brother Melvin, Brother Chi Leong were some of our pioneers driving these early PWMs.
  11. This approach works, because it allows us to recognise wage structures and challenges unique to each industry, and at the same time we tailor solutions for them.
  12. We saw results.
  13. PWM workers enjoyed faster wage growth than the median worker. That is proof in the pudding.  
  14. From 2017 to 2022, we saw PWM workers in the Cleaning, Security and Landscape sectors gaining 11% wage increase cumulatively, higher than the median worker.
  15. The benefits of the PWM was clear. 
• In 2020, the pandemic shone a spotlight on the essential nature of the work of our lower-wage workers and their precarity of their jobs – and there was consensus that we needed new approaches, and stronger tripartite support to help our lower-wage workers.
• We therefore set up a Tripartite Workgroup on Lower-Wage Workers to study and consult employers, workers and sector agencies.
• We studied established models internationally to learn the upsides and the pitfalls, worked sector-by-sector to ensure our solutions were relevant, and we brought all these back to our local context. I think that’s important – can it work here in Singapore.   
• Most importantly, I have to thank employers who were the hardest hit during the pandemic.  . To talk about wage increases, accelerated wage growth, productivity improvements while we’re all fighting fires during Covid – I think that was tough. So employers such as those in F&B and retail sectors - I have to thank all of them for playing a role in this as they continued to soldier on and support our PWM expansion. 
• In 2021, the Government accepted the Workgroup’s recommendations.
• Other than Food Services and Retail sectors, we have introduced Occupational PWM for administrators and drivers.
• In July last year, the Waste Management PWM came into effect.
• Mr Fahmi and Mr Felix Loh were the co-chairpersons of the Waste Management tripartite committee.
• They did a lot of work engaging the industry to design the PWM in a way that rewards and incentivises hard work, skills and professionalism.
• In addition to PWM, we made it a requirement for all firms hiring foreign workers to pay local workers at least the Local Qualifying Salary. This was also a new measure as part of the Tripartite Workgroup on Lower-Wage Workers.  
• Together with the Singapore Business Federation, we also rolled out the Progressive Wage Mark to recognise and encourage firms to voluntarily pay their workers progressive wages.
  1. With these efforts, we expanded the coverage of Progressive Wages to up to 9 in 10 lower-wage workers.   
  2. As we commemorate this milestone, I would like to commend the dedication and hard work of our employers, workers, and the public officers.  Many of you have given your time and energy to work out fair and sustainable PWM recommendations.
     
     
• Thank you all for your courage and persistence to drive changes, to make it better for every one of our lower-wage workers.

The Tripartite Approach: A Win-Win for Employers and Employees

• We are celebrating PWM today.
• But a celebration of PWM is in fact a celebration of tripartism.
• PWM will not work without tripartism.
• Our tripartite partnership is the backbone of the PWM's success, because it fosters a "win-win" outcome for all.
• This is possible when we have a common and long-term picture of success:
  1. For workers, PWM provides good wages and better lives.
  2. The skills ladder gives them opportunity for career progression.
  3. For employers, a better-skilled and motivated workforce is a productive one.
  4. Through higher wages and opportunity to progress, employers are also better positioned to attract and retain manpower.
  5. Progressive employers who care for the well-being of workers and have the PW Mark accreditation also stand out in a marketplace that has become more discerning and concerned about social outcomes.
  6. Our surveys show that almost 4 in 5 businesses will prioritise purchases from companies with the PW Mark. That shows the difference in how we perceive support for our lower-wage workers today.

• At the industry level, PWM’s wage benchmarks and training roadmaps set a standard.
• Alongside industry transformation efforts, and outcome-based sourcing, businesses can shift towards competing on innovation, productivity and quality, instead of costs alone.

• With the conviction that this is the success we want for Singapore and Singaporeans, tripartite partners are able to work towards long-term progress.
• Often, I hear anecdotes of how partners work collaboratively to achieve win-win outcomes.
  1. Such rapport and trust did not come overnight.
  2. Among recently introduced PWMs, the negotiations for Retail and Food Services PWMs were particularly challenging as they were recovering from the economic impact of the pandemic.
  3. Sister Wan Ling played a pivotal role engaging workers and employers, explaining how PWM will benefit them, and assuage their concerns.
  4. For the employers, I can fully understand it was not easy as we had safe-distancing measures and a lot of things that made it challenging for them to even run their business.
  5. Often, I was told, committee discussions were vigorous, as members debated on the potential impact.
  6. Brother Andrew would weigh in with calm resolve, convincing employers that this is the right thing to do, to uplift workers, and to help employers attract workers.  
• In the next few years, we expect even more significant wage increases.
• For example, the basic wage requirements for general cleaners will increase by 85% over just six years, from $1,312 in 2022, to $2,420 in 2028.
• This is much higher than what we saw in the early days, when wage requirements grew more gradually by 31% over nine years from 2013 to 2022.
• In the security sector, the growth is expected to be stronger, with the security officer’s PWM wage increasing to $3,530 by 2028, because of the higher potential of productivity gains in the sector to match the wage growth in PWM. So it’s not just about wages, but how the sector and industry can work in transformation to be more productive so workers can also gain part of the progress.
• This is a testament to the effectiveness of tripartism and PWM.

• On other occasions, we see how unions seek to understand employers’ perspective.
• During the Tripartite Workgroup’s discussions, I recall NTUC advocating for upskilling to feature strongly in PWMs.
• The unions believe that wages should increase in tandem with skills improvement needed for businesses to transform.
• Otherwise, businesses will not do well, and everyone loses.
  1. So we see how tripartite discussions can be challenging if we only look ahead to the next day.
  2. But because we choose to take a long-term view and find the space to collaborate, we can build a sustainable solution.
     

A Whole-of-Society Approach to Uplifting Lower-Wage Workers

• The Government, the third pillar of Tripartism, has always been a strong advocate in uplifting, you can even say advancing the interests of our lower-wage workers.
• I was privileged to be given the opportunity to chair the TWG-LWW in 2020.
• I saw how committed MOM and our partners worked hard to improve the lives of our LWWs.
• We studied our workforce data and international models extensively, and we also consulted lower-wage workers, employers and service buyers.
• This brought about new approaches in expanding PWM to non-regulated sectors (such as Occupational PWMs), the LQS, and the introduction of transitional support for employers under PWCS, which we brought to the Labour Movement and employers to discuss, adopt and implement.
• Many of these measures and schemes, would not have been possible without the foundations laid by our predecessors across Government – with schemes such as Workfare, introduced by then- 2^nd Finance Minister Mr Tharman in 2007.
• And PWM, which then-Manpower Minister Lim Swee Say had advocated passionately for, and many successive Manpower Ministers such as Ministers Josephine Teo and Tan See Leng have carried the torch, providing strong leadership to expand PWM.
• Throughout my time in MOM and during the TWG-LWW, I also met many public service officers who walked through that journey with us.
• Many had joined the Civil Service to build a fair and just society, and they’ve also played important roles, in policy, enforcement, mediation, even educating workers and employers.
• I’d like to thank them too because I think they play a very important role
• Most recently and notably, our most senior advocate PM Lee announced at the 2021 NDR, the Government’s continued commitment for our LWWs, and introduced the slew of Progressive Wage measures to achieve 9 in 10 LWW coverage and significant enhancements to our PWM and LQS frameworks.

   

• Today, the Government continues to step up our support.
• We have continued to boost incomes and retirement savings of workers through Workfare, supporting half a million lower-wage workers annually, through WIS payments amounting to $1.1 billion.
• For employers, there are also generous grants and subsidies to improve productivity.
• Last year, we enhanced the Progressive Wage Credit Scheme to encourage employers to give higher wage increases.
• The PWCS provides up to 75% support for wage increases given to eligible workers.
• For 2022, the Government disbursed about $1 billion of PWCS funding to 70,000 employers, who gave wages increases to more than 345,000 employees.
• The median monthly wage increase supported by PWCS was about $300. That’s quite meaningful if we think about the wage increases of our lower-wage workers per year.  
• So I’m pleased to announce that we are reviewing the PWCS to further enhance support, and will be announcing details at Budget.
• At the same time, the Government will continue to review how we can further support workers.
• One of the policies we are also reviewing is the Local Qualifying Salary, to ensure that wages for our lower-wage workers continue to keep pace with market.

   

• To mark today’s occasion, on PWM’s 10^th anniversary, I am pleased to share that MOM has also developed a Progressive Wage Portal for our LWWs.
• The Portal will help workers better understand what their PWM wage is.
• They can also see the PWM job level that their employers have placed them on, and whether their wages meet PWM requirements.
• Workers can log in with their SingPass. I would like to encourage all workers to try it out.

   

• Lastly, I would like to remind everyone that all of us have a role to play
  1. In 2021, we launched the Alliance for Action for Lower-Wage Workers that brought together 80 like-minded Singaporeans from all walks of life, who successfully initiated 14 ground-up projects for lower-wage workers.
  2. Over two years, community partners and businesses came onboard to support these projects in areas such as securing employment opportunities and protecting the well-being of workers including their rest areas.
     
     
• As consumers, we can also do our part by supporting businesses that have the PW Mark, to help make PWM more sustainable.

Continual Journey

• Ten years ago, we set out to improve wages of the lowest-paid workers in outsourced sectors.
• Today, we have expanded our efforts multi-fold, led by a bigger vision: to build a more inclusive society, and ensure every worker enjoys the fruits of growth and of Singapore’s prosperity.
• In the next phase, we must press on to make wage growth sustainable amidst global competition for business and manpower.
• This means that industries and businesses must transform to be more productive and manpower-efficient, and jobs must be designed for future workers with higher skills and aspirations.
• As we commemorate a decade of PWM, I want to thank all of you again for your commitment, hard work and support.
• Our journey is far from over.
• Let us all renew our commitment, and remember that our success in uplifting lower-wage workers is not just a matter of economics but a reflection of our values as a society.
• Thank you very much, have a wonderful day.