DPM warns against minimum wage system that has affected US and countries in Europe
The wage ladder, which allows workers in low-wage jobs to get higher pay through training and productivity gains, is a targeted approach that helps prevent older and more vulnerable workers from losing their jobs as salaries rise, said Deputy Prime Minister Tharman Shanmugaratnam yesterday
This is why the labour movement’s progressive wage model, introduced in June 2012, is better than introducing a national minimum wage, Mr Tharman told a gathering of 300 service buyers and providers at a symposium, as he reiterated how a minimum wage system has crippled countries in Europe and the United States, particularly in worsening employment conditions.
In most European countries, high minimum wages have been accompanied by high unemployment, he noted, with the impact being felt most severely by the least-skilled.
related:
Targeted wage model can better help vulnerable:Tharman
Cleaners, guards to get pay hike under new system
NTUC seeks pay rise for low-wage workers
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Govt
looking at mandating progressive wages in landscaping
The labour movement's progressive wage
model may be made compulsory in the landscaping sector as well,
Senior Parliamentary Secretary for Manpower Hawazi Daipi said in
Parliament on Friday.
It will be the third one after the
security and cleaning industries, though Mr Hawazi stressed that
there is no plan to legislate the model in other sectors.
The scheme sets out career ladders with
benchmark wages for resident workers - Singaporeans and permanent
residents - in various sectors.
New wage ladder and $3.5 million training programme for carpenters
Carpenters can look forward to having their own wage ladder from this month.
The National Trades Union Congress has introduced a new voluntary wage ladder for carpenters on Thursday where the minimum monthly basic pay starts at $1,500. When they become more skilled, their minimum monthly basic pay will increase to at least $3,000.
It is the first wage ladder that the labour movement has introduced in what it calls "traditional skills sector" in which Singapore workers are at risk of disappearing as many of them shun these jobs.
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Certain cleaning firms exempted from licensing scheme
Firms that clean swimming pools and homes will not come under a new licensing scheme for the cleaning industry.
Announcing the exemption on Friday, the authorities also said that the tighter measures to regulate the industry will kick in "within five months" from April and cover firms that provide general cleaning services in public places and private buildings.
Besides swimming pool and home cleaners, firms such as those that remove construction debris from work sites, clean building facades on gondolas and animal pens in the zoo are also exempted, said the National Environment Agency, which is spearheading the new scheme.
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Cleaners already earning at least $1,000: Firms
Most bosses are backing the new guidelines, saying the rules will help level the playing field and give them more leeway to raise wages. -- ST FILE PHOTO
The tight labour market has already forced cleaning companies to raise their workers' monthly pay above the prescribed $1,000 mark, bosses told The Sunday Times.
This has driven cleaning costs up - some by almost 40 per cent - over the years.
Contract clients, including those who run hawker centres and building management firms, say they are bracing themselves to be hit harder when their deals are up for renewal later this year.
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Not the Singapore National Minimum Wage
“We are not setting wages by political decree” pronounced deputy prime minister Tharman Shanmugaratnam as he announced what must be a landmark wage policy on Wednesday, January 8, for wages in the cleaning industry in Singapore.
This remark might strike outsiders as unusual particularly since most politicians around the world would be far quicker to grab brownie points for passing anything close to a Singapore national minimum wage legislation. Mr Shanmugaratnam after all was announcing a set of soon-to-be-mandatory wage levels for cleaners.
In business friendly Singapore however, the concern is to address also the concerns of the business community.
related:
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Mandatory wage ladder a clean sweep for workers
This new licensing-cum-wage ladder system announced last week is the boldest attempt yet by the Government to raise persistently low salaries in the cleaning and security sectors. Industry players, it appears, have suppressed wages in order to submit price-competitive bids to provide cleaning and security services.
It came after persuasion and leading by example failed. In 2011, a voluntary accreditation scheme was introduced for cleaning companies. The Government specified that only accredited companies could bid for government contracts. But as government contracts covered only 11 per cent of cleaners, the move failed to lift wages across the sector.
The latest move, however, is different and goes further than any past measure to lift wages for cleaners, whose wages have stagnated or fallen for years.
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Progressive Wage Model To Help Low-Wage Workers
ALL 55,000 local cleaners in Singapore will earn at least $1,000 each month from September, up from $850 now.
In a bold move, the government is introducing an amendment to the law in Parliament this month which, when passed and implemented, will in effect set a tiered wage system for different jobs in the cleaning sector.
A full-time indoor cleaner will earn at least $1,000 a month. Those who are trained to handle cleaning machines will earn at least $1,400, and a supervisor, $1,600 - all salary levels which are negotiated with employers and unions.
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The real price of progressive wages
The latest move by the Government to make adopting the progressive-wage model compulsory for cleaning companies (by tying it with licensing) is an important one. However, it must not be misunderstood to be a capitulation to those who clamour for minimum wage.
Supporters of minimum wage often ignore the fact that a government can legislate only nominal wages - it cannot mandate that real wages increase. So, the effect of minimum wages always stands in danger of being eroded by inflation, especially if firms, in order to afford those increased wages, raise prices as well.
A sustainable increase in wages can come only from productivity increases, which come from training, or the adoption of technology or better work processes. These enable the company to lower overall cost and raise efficiency, giving it more leeway to pay higher wages without having to also increase prices.
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Don’t horse around with wage legislation
Minimum wage is a beast. And it comes in a wide variety of species.
Each species has a character and a personality a government must manage. If you want to ride a horse, you cannot just jump on a wild stallion and expect it to respond to you. It will throw you off and kick you in the face.
It is not useful to get into a technical debate about the pros and cons of minimum wage because there are sufficient studies to support both sides of this argument. The further you argue, the more it becomes a belief rather than a science: the more it becomes politics.
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Basic wage levels to be mandated in cleaning and security sectors
Companies in the cleaning and security sectors will soon be subject to new rules that require them to set basic salaries for workers.
The government is making the labour movement's progressive wage model compulsory in the two industries, starting with cleaning. Details for the security sector are still being worked out.
From September this year, entry-level pay for cleaners will be set at S$1,000 monthly, 20 per cent higher than today's median basic wage for the sector.
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Minimum Wage: The govt has done the right thing
The Government has decided to introduce a licensing regime which will require employers to pay cleaners a starting salary of no less than $1,000. It has done the right thing.
The PAP will not admit that this is akin to setting a minimum wage, which it has always resisted. Nevertheless it is a positive development for workers in Singapore especially those in the low-income groups. The SDP welcomes the policy change.
There, however, remain concerns. First, $1,000 is still not fair wage. Given that the cost of living in Singapore is one of the highest in the world, a salary of $1,000 is not sufficient for workers to survive on.
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Basic salary rate is a good start, but does not go far enough
The government has just announced that it will set a basic salary rate of SGD1000 for cleaners. While this is an important first step, I query:
- Why the new rule does not cover foreigners and resident Singaporeans equally
- Why the same rule is not being extended to workers in other sectors such as the construction industry
There have been many incidences of tension between foreigners and Singaporeans of late and while this regulation is no doubt well meaning, it could be counterproductive by further highlighting the Singaporean and non-Singaporean divide.
related:
Targeted minimum wage – a positive step, but more can be done
Is Minimum-Wages Really That Bad For Singapore?
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Cleaners' Progressive (Minimum) Wage Model
The Government will introduce the Progressive Wage Model ("PWM") in the cleaning services sector.
It will legislate cleaning services providers to pay their staff an entry-level salary of $1,000 per month, and subsequently give staff increments in tandem with their skills upgrading.
The median gross monthly wage is about $850 currently.
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Guards' wage model 'different'
The wage model for the security sector may be different from that for the cleaning sector when it is eventually legislated by law.
This is because the model will have to take into account overtime pay, said security firms and industry players.
Unlike cleaners, who work 44-hour weeks, guards typically work 72 hours each week, or 12-hour shifts each day over six days.
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Cleaners, guards to get pay hike under new system
Cleaning firms must offer entry-level salary of S$1,000 and give increments in tandem with skills upgrading
The fight to raise salaries in two sectors plagued by stagnant wages achieved a breakthrough yesterday, with the Government announcing the implementation of the progressive wage model as a mandatory licensing condition for all companies providing cleaning and security services.
Starting in September — after legislative changes are introduced later this month and passed by Parliament — cleaning companies must pay an entry-level salary of S$1,000 each month, up from the current median gross monthly wage of about S$850, and subsequently give increments in tandem with skills upgrading.
The impasse on this matter in the security sector drags on, but once the tripartite partners reach a consensus on the details of the progressive wage model to be implemented, it will be tagged on as an additional requirement in its existing licensing framework overseen by the police. Both sellers and buyers of the two services who do not comply will face penalties.
related; Basic wage levels to be mandated in cleaning, security sectors
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Singapore sets basic wage of S$1,000 for cleaners
Singapore’s government on Wednesday moved to set an entry-level minimum wage of S$1,000 for its cleaners
Deputy Prime and Finance minister Tharman Shanmugaratnam announced this in a speech at a best sourcing symposium on Wednesday morning, saying it will mandate an up-to-20 per cent increment in the entry-level wages for cleaners.
DPM Tharman noted that the 55,000 cleaners in the country’s resident workforce earn a median gross wage of $850 per month on average.
“Not only is that low pay, but most cleaners have also not enjoyed the real wage growth seen among workers nationally, including other low-income Singaporeans, in the last five years,” he said, in what some labour activists are seeing as a significant step from previous positions the government has taken against stating a minimum wage.
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New licensing scheme for cleaning companies from September
Once passed and implemented, the new law will ensure that cleaners earn at least $1,000 a month, while supervisors can earn at least $1,600. Some 55,000 cleaners whose median basic monthly pay is $820 now stand to gain from the move
Deputy Prime Minister Tharman Shanmugaratnam made the announcement on Wednesday at the E2I Best Sourcing Symposium. Here is an excerpt from his speech:
The Government has supported the tripartite PWM in the cleaning sector, both as regulator and as buyer of services.
The recommended PWM starting wage levels were incorporated as a requirement in the National Environment Agency's (NEA) voluntary Enhanced Clean Mark Accreditation Scheme from November 2012.
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Govt to set ‘minimum wage’ for 2 industries
The government is setting “minimum wages” for the cleaning and security industries but has refused to acknowledge so because of the oidious connotation of the term “minimum wage” among businessmen and investors.
It will begin by legislating what is effectively a minimum wage for the cleaning sector.
It will introduce an amendment to the law this month which, when passed by Parliament and implemented, will set a tiered wage system for different jobs in the sector. This was announced on Wednesday (8 Jan) by DPM Tharman who is also the Finance Minister.
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THARMAN: A TARGETED WAGE MODEL IS BETTER THAN A MINIMUM WAGE
Speaking about the new changes to raise wages in the cleaning and security industry, DPM Tharman explained why such a targeted wage model is better than a minimum wage.
He explained that implementing a minimum wage often goes hand in hand with higher unemployment.
Giving examples from the US and Europe, Tharman discussed that raising the minimum wage makes all workers more expensive and so lower skilled or less educated workers find it more difficult to find employment as their labour is not seen as worth the pay by employers.
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“Minimum wage” for cleaners
I refer to the article “New licensing scheme for cleaning companies from September” (Straits Times, Jan 8). It states that “The Government will introduce a new law in Parliament this month where cleaning firms that do not comply with the minimum wages in the cleaning sector will be punished, said Deputy Prime Minister Tharman Shanmugaratnam on Wednesday.
Once passed and implemented, the new law will ensure that cleaners earn at least $1,000 a month, while supervisors can earn at least $1,600. Some 55,000 cleaners whose median basic monthly pay is $820 now stand to gain from the move.”
Not “minimum wage”? After so many schemes like the progressive wage concept, cleaning firms’ accredition scheme for Government contracts, PAP town councils’ cleaners’ minimum $1,000 wage, etc – it would appear now that the Government has finally “thrown in the towel” – to effectively legislate a minimum wage, even though we still refuse to call it a minimum wage.
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NEW COMPULSORY WAGE MODEL FOR CLEANERS AND SECURITY GUARDS TO RAISE PAY BY 20%
The progressive wage model is not the same as a minimum wage as it focuses on increasing salaries based on improved productivity which can be achieved through training and skill upgrading programs
Despite the government constantly rejecting the need for a minimum wage, they have now decided to make the progressive wage model compulsory for the cleaning industry and the security industry.
These two industries are two of the lowest paid professions in Singapore and starting from September this year, cleaners can expect to see entry level salaries of $1000 a month. That is a 20% increase on the median basic wage today.
In order to bring this into effect, Vivian Balakrishnan, the Environment and Water Resources Minister will be putting forward a compulsory licensing regime to force all cleaning companies to have to implement the progressive wage model.
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PAP gahmen refuses to consider Minimum Wage, but now mandates "basic wage" for cleaners
The government is making the labour movement's progressive wage model compulsory in the cleaning and security sectors.
This will set basic wage levels for low earners in these sectors through the model, which seeks to progressively raise wages as workers' productivity improves through skills upgrading and training.
For a start, all cleaning companies will need to have the model in place under a mandatory licensing regime that will be introduced this year.
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Towards A Targeted Socialism Not Minimum Socialism
The PAP is using $1000 to showcase the targeted democratic socialism announced last year. Cleaners and guards will have a guided basic wage of $1000 per month. And the PAP claims that this is not minimum wage. Only affected companies need to comply if they want to renew their licenses and stay in business.
What is the difference between a targeted wage and a minimum wage? We don’t know as we have to watch the development whether all Singapore workers will demand for $1000 per month when applying for a job. Now, there is a targeted wage rate, will other industries follow or not?
More importantly, will this close the gap between the rich and the poor? Most likely not, from $800 to $1000 looks like a big increase of 20%, but what is $200 per month to a high income earner? So, this is a targeted approach, just like a 5-year plan, how often will it adjust? Or, the target is set intentionally low - an outdated calculation just to showcase the so-called democratic socialism. Because there is a popular demand and because the fact shows no wage increase in the past 10 years, the PAP is forced to come out with a lower than expected targeted wage guideline?
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Legislating A Low Minimum Wage for 12% Of Low-Wage In Singapore
The Today newspaper reported that, “starting in September — after legislative changes are introduced later this month and passed by Parliament — cleaning companies must pay an entry-level salary of S$1,000 each month, up from the current median gross monthly wage of about S$850″.
This move, announced by Deputy Prime Minister Tharman Shanmugaratnam, is a step in the right direction and should be applauded.
However, as critical observers of our country’s sociopolitical situation, the question to ask would be – is this move significant enough?
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Minimum Wage, Politics, and the Elephant in the Room
The government, through Deputy Prime Minister/Finance Minister Tharman Shanmugaratnam, has announced a “minimum wage” for the cleaning and security services industries in an extraordinary move that follows a whole slew of ineffective measures meticulously detailed by Leong Sze Hian over the years. Despite the previous schemes, the current median salary for cleaners is still only $850 per month!
The government, and even the union, are struggling with the correct word to describe their unique initiative. It comes closest to a collective agreement since it is industry specific. However, CAs are the result of negotiations and are not mandated by law as this measure is. I shall refer to this recent move by the government as “base salary” since minimum wage has an entirely different meaning and the government itself has said that their “minimum wage” should not be confused with, well, minimum wage.
Apparently the “base salary” of $1000 per month—which seems rather low and entirely arbitrary since there is no formula provided for how this figure is derived—is a result of the silly “tripartite approach” where outcomes are based on pow-wows between the government, the union—which is controlled by the government—and employers. Since the government is also the largest employer or buyer of services, the tripartite arrangement is in reality a coalition of the government, government and government making the process a silly conversation between Me, Myself and I. In this uniquely Singaporean arrangement, workers’ interests are subjugated to that of the government’s.
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related:
Employment Woes
Singaporeans FIRST 新加坡人为先
Progressive Wage Vs Minimum Wage
A minimum wage for Singapore?
