Sunday 23 February 2014

3 attributes of progressive wage model

WE THANK Mr Cheng Shoong Tat for his letter ("Progressive wage model not for all"; Thursday). While we generally agree with his arguments, we need to correct the inaccurate perception that the Government has not made it clear that the progressive wage model is intended to address only certain sectors.

On the contrary, Dr Vivian Balakrishnan emphasised three unique attributes of the progressive wage model in Parliament on Monday. The following is extracted from the Hansard:

"First, it is a targeted approach. The progressive wage model enforced by the Government is not going to be necessary or even considered across the board in all the different sectors. We have chosen the progressive wage model for the cleaning industry because we believe there are certain peculiar characteristics of this industry. This has been one that, for too many years, has been characterised by cheap sourcing and where the majority of Singaporean and Singaporean PR workers have been older workers with low education, limited job choices, non-unionised and have low bargaining power. The case for a targeted government intervention is therefore stronger in such circumstances.

"The second attribute: The progressive wage model is determined through tripartite negotiations. It is not set by political decree. The unions and the employers must discuss and they must agree on the appropriate benchmarks used in the progressive wage model wage-skill ladder. The licensing regime merely sets up the framework for these agreed benchmarks to be operationalised in a fair and transparent fashion in a level playing field. This tripartite approach is important - in fact, I think it is crucial - and it is a unique success ingredient for the Singapore model. It reduces the risk that workers, especially our older and more vulnerable workers, will lose their jobs as wages rise to unsustainable levels.

"The third attribute is that the progressive wage model is part of a wider and more comprehensive government effort to raise wages of lower-income citizens and their families. Eligible low-income cleaners will continue to receive wage supplements in the form of the Workfare Income Supplement, which can constitute up to 30 per cent of their wages, as well as enjoy generous training subsidies through the Workfare Training Support scheme."

Goh Chour Thong
Press Secretary to the Minister for the Environment and Water Resources
ST Forum, 22 Feb 2014

Mandatory adoption applies to only a few sectors

THE labour movement believes the concept of improving skills, productivity, jobs and wages is relevant and applicable to all workers and all sectors ("Progressive wage model not for all" by Mr Cheng Shoong Tat; Thursday).

However, this does not mean the adoption of this wage model will be made mandatory across all sectors.

The model is best adopted in a voluntary manner, with the exception of certain sectors that are plagued by low wages and skills, and cheap sourcing.

This is why the labour movement has called for mandatory licensing and adoption of the progressive wage model for only three specific sectors for a start - cleaning, security and landscaping.

This is to ensure that workers in these sectors not only get a more decent starting pay based on skills, productivity and job scope, but also have a better progression pathway by making them more skilful and their jobs easier, safer and smarter.

Patrick Tay Teck Guan
Assistant Secretary-General National Trades Union Congress
ST Forum, 22 Feb 2014

Progressive wage model not for all

BEFORE commentators get overexcited about the so-called progressive wage model, let it be established that it should be an exception, and not a norm, in a functioning market economy like Singapore ("Wage model: A case for more transparency?"; Tuesday).

While there may be sector-specific factors - for example, lack of collective bargaining or poor sourcing practices - that lend justification to applying such a model to certain industries, it should never usurp the market's role in determining wages in the rest of the economy.

Singapore must not become a command economy in which wages are administratively set by committees, a prospect some commentators appear to be pointing to by calling for more sectors to come under the wage model.

The many questions raised by MPs during the parliamentary debate on Monday testify to the numerous imponderables committees have to face when they try to take over the market's role in determining wages.

What constitutes "fair" wages? Which employers must be made to pay these? Who must be made to pay how much to such employers, so that the latter can pay fair wages? And how can fair wages be determined without mandating "fair" prices too?

By not making it clear that the progressive wage model is intended to address only the very specific problem of persistent low-wage/low-skill cycles in certain sectors, the Government risks encouraging the belief among some Singaporeans that it has the power to mandate fair wages.

I was shocked when I heard on the radio a few days ago that some people were calling upon the Government to set wage ranges for all Singaporeans based on age, qualifications, experience and job description.

Yes, nations cannot be governed by economic principles alone. For us to stay together as a community, economic principles, however rational and logical, must be tempered by political considerations, however irrational and illogical.

But herein lies the crux of the matter: Politics must temper, but must never be allowed to replace, economics.

Cheng Shoong Tat
ST Forum, 20 Feb 2014

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