Lazy government and employers the kink in Progressive Wage Model

By Dave Dee

Why isn’t Lim Swee Say’s Progressive Wage Model working as well as it should?

The government only legislates after a voluntary phase. Progressive Wage Model can be legislated any time, but the government chose a time frame to introduce and persuade employers to adopt this model voluntarily before legislation.

Cleaners had to wait two years for the Progressive Wage Model to be legislated for the cleaning industry before they could earn at least $1,000 a month.

Security officers have to wait another two years until 1 September 2016 in order to get a 30% pay increase from $800 to $1,100.

The only good thing is that some companies are voluntarily adopting the Progressive Wage Model even before it’s legislated. However, I feel too many employers only adopt at the last minute before legislation.

Instead of a minimum wage, Singaporeans have to wait for government bodies and employers per sector to agree with Lim Swee Say’s Progressive Wage Model proposals.

The logic is that each sector has different dynamics and difficulties that need a targeted approach, which sectoral tripartite partners (e.g. National Environment Agency, cleaning companies, and NTUC’s unions in cleaning sector) all have to agree on.

While the Progressive Wage Model is meant for all workers, the reality is that it is dependant on whether employers apply this model in their HR practices.

Many of our lazy employers don’t want to bother, especially in industries where cheap-sourcing is prevalent or where cheap foreign labour is available.

On the flip side, if some employers have good HR practices, even PMEs are covered by the Progressive Wage Model (I’ve never heard of a minimum wage for PMEs before, can Singaporean PMEs have one too?)

The caveat of the Progressive Wage Model is that our wage increases are accompanied by raising our skills, productivity and career responsibilities.

A proactive worker will take the effort to improve wherever he can. However, a large majority of us depend heavily on employers to send us for training, invest in productivity initiatives and develop career ladders for us to climb.

Again this is where we workers are subject to the whims of our employers.

If we have a lousy employer, we probably have to wait for legislation for Progressive Wage Model to make them increase our pay, send us for training etc.

One argument commonly propagated for Lim Swee Say’s Progressive Wage Model is that if a worker is paid more, part of his pay increase will be tempered by his higher productivity, and not be completely transferred downstream to the consumer as rising costs.

However, Singapore’s productivity isn’t exactly in the best of shape, so expect costs to rise anyway. This is one issue that minimum wage can’t solve either.

While the Progressive Wage Model does have its merits (such as improving our jobs and we can earn more than the minimum wage based on our capabilities), I feel many employers are way too slow in improving the workers’ productivity, skills and career prospects.

Although the government is legislating the Progressive Wage Model per sector, to push laggard employers to hurry up and invest in us workers, it is too slow.

How long do we have to wait till we are finally covered by government legislation for Progressive Wage Model and for lazy employers to wake up their idea?