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Progressive Wage Model for F&B workers: 31% real pay decrease in 17 years?

If the Progressive Wage Model (PWM) has failed for cleaners – will it work for F & B workers?

I refer to the front page headlines article “F & B workers to be assessed if they can get on wage ladder” (Sunday Times, Jun 24).

The article states:

“Kitchen helpers and other low-wage workers in the food and beverage (F&B) industry could be next in line for a basic wage and structured increases under the Progressive Wage Model (PWM).

There is no publicly available data, but The Sunday Times understands there are over 30,000 low-wage workers in the F&B sector who earn $2,000 or less a month. The median monthly basic wage of a hawker stall assistant in 2016 was $1,100, while kitchen assistants got $1,117 and waiters $1,300.”

The PWM which was launched in 2012 has clearly been an utter failure.

Here’s why.

Real wage fell 31% in 17 years?

According to the article “Mindset change needed to help low-wage workers” (Straits Times, Feb 7, 2012), in 2000 – the median gross wage for cleaners and labourers was $1,277.

After accounting for inflation for the last 17 years or so, I estimate that in year 2000 dollars (June 2000 CPI 74.371), the $1,170 median gross salary of hawker centre cleaners now (note: I cannot find “cleaners and labourers” wage statistics in the MOM’s wage benchmarking tool) is equivalent to only about $873 in 2000 dollars. So, what this may mean is that the real pay of cleaners has declined by about 31 per cent in the last 17 years (2017 CPI 99.502) or so.

According to the Ministry of Manpower’s  (MOM) web site – Progressive Wage Model  (PWM) Cleaning Sector – “If you have new service contracts that starts from 1 July 2017, you must use the following revised wages” – (at least) $1,060 for Group 1 – Office & Commercial – General/Indoor Cleaners, (and) Group 2 – F & B Establishment – General Cleaners”.

Isn’t a basic monthly salary of $1,060, including employee’s CPF still very very low?

Talking about $1,000 pay since 2008?

In this connection, we have been talking about paying cleaners $1,000 since 2008 – “Full-time cleaners now earn about $1,000 a month on average, compared to about $750 before the (Town Councils’ cleaners’) scheme was launched in 2008” (“Cleaners’ pay up $250 to $1,000: Congratulations?“).

So many schemes in the last 8 years?

In the last eight years or so, we have had so many schemes and initiatives to raise cleaners’ pay to $1,000 (see below).

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PWM or full-time worker for foreign worker quota?

According to Minister of State for Manpower Sam Tan in 2017,  the amount a resident worker must earn to count as a full-time worker will rise from $1,000 now to $1,100 in July, and $1,200 from July next year.

The number of foreign workers a company can hire is tied to its number of full-time local workers, under a quota system known as the Dependency Ratio Ceiling (DRC). The DRC of 60 per cent in the manufacturing sector, for instance, means an employer can hire up to 1.5 foreign workers for every full-time local worker.

So instead of PWM as a guiding principle, it seems from the wages over the decade that the minimum salary to be considered as a full-time worker to hire foreign workers, has been the bar in which employers have been following.

Another interesting read on the same day in the Sunday Times is Chua Mui Hoong’s “Fight the world of lies and gaslighting with the blaze of truthful inquiry“.

Uniquely Singapore!