Once in a while, pictures of our pioneer generation surface up on social media. It usually consists of elderly men and women past their retirement age working in low paying jobs such as a cleaner or security guard, and facing difficulties in their daily work due to their physical limitations.
These pictures are usually accompanied by caption asking just how tough it is to retire in Singapore with low wages, and how the government should be doing more for these people.
Minimum Wage Model
Prior to the introduction of progressive wage, we wrote about why a minimum wage system may not be too bad for Singapore.
In the absence of a minimum wage system, we could have cases of lower skilled and elderly local workers being employeed in jobs that not only offer them little progression, but also pay them wages that are insufficient to meet ends need.
However, a minimum wage system does introduce a blanket wage increase in all sectors. This includes sectors like construction, which are highly reliant on the foreign workforce.
Progressive Wage Model
Progressive Wage Model was introduced by the Labour Movement back in 2012 with an objective to help workers earn better wages through skills upgrading and productivity improvements.
Progressive Wage model is similar to the minimum wage system. The key difference between the two lies in the fact that the progressive wage model appears to be a more flexible model, enabling the government to strategically target industries. From our observations, the industries that they are targeting are those with a high percentage of locals.
Cleaning, Landscape and Security
The Singapore National Trades Union Congress (NTUC) has pushed forward the adoption of the Progressive Wage Model in the cleaning, landscape and security sectors. It is no surprise that these sectors tend to be the more popular sectors for elderly Singaporeans to earn their keep in our expensive country.
Singaporeans and PR make up close to 88% of all security guards in Singapore. With progressive wage implemented on it, coupled with proper training and progression path to generate more income, Singaporeans are likely to be the one’s benefiting from it. The same concept applies for the other two sectors as well. Conceptually, it appears to make sense.
These sectors tend to be those where workers are not as well educated, and hence at times, lacking the information or the mobility to be able to switch industries or companies to earn better wages. Neither are they usually in a position when they can ask for better wages. The government stepping in will help.
With a proper wage model in place, and hopefully, better flow of information in the future, workers in these sectors should understand their rights. This will act as a watchdog for companies in these sectors.
Some people will argue that the progressive wage system implemented onto specific industries is insufficient for adequate living in Singapore. That is a fair point, and of course, along with it, the endless debate on just what the figure should be. Progressive wages should not be confused as the government stance on just how much is enough for living in Singapore. The government, from what we know, has not taken a position. Yet.
The point of progressive wage is that workers in selected industries are now taking home more than they used to. And if they continue to improve themselves, their wages should continue rising.
Everyone has a part to play. If you are reading this, there is a 95% chance that progressive wages does not affect you. However it doesn’t end there. Could there be people you know around you who are in one of these industries? If so, share with them on progressive wages, and what they can do to earn a better salary for themselves in the future.
Listen to our podcast, where we have in-depth discussions on finance topics that matter to you.