Firms hiring foreign workers will be required to pay all their local employees a monthly salary of at least S$1,400, said Prime Minister Lee Hsien Loong at the National Day Rally (NDR) on Sunday (29 Aug).
In his English speech, PM Lee noted that the government has accepted a tripartite workgroup’s recommendations to help lower-wage workers more, which include mandating companies that hire foreign workers to pay all their local employees a local qualifying salary (LQS) of S$1,400.
It was said that companies were previously required to pay a local qualifying salary to some local employees, depending on the number of foreign workers they hire.
PM Lee said that the LQS will be adjusted from time to time, adding that the Progressive Wage Model (PWM) will be extended to cover more sectors, starting with retail from next year and food services and waste management to follow.
It will also cover specific occupations that cut across sectors, starting with administrative assistants and drivers, he asserted, adding that the government will also increase its annual spending on the Workfare Income Supplement to S$1.1 billion in two years.
“This allows us to raise payouts for all Workfare recipients, and to help younger lower-wage workers, by starting Workfare younger, from the age (of) 30 rather than 35.”
The Prime Minister said that the extended progressive wages and tighter requirements for local qualifying salary will cover eight in 10 lower-wage workers.
“And if we include the Workfare enhancements, almost all lower-wage workers can look forward to higher incomes within the next two years,” he added.
PM Lee noted that the government will also introduce a Progressive Wage (PW) Mark to accredit companies that are paying all their workers progressive wages.
“The PW Mark will tell consumers which companies are paying all their workers decent wages,” he said. “The public sector is a major buyer of goods and services, and it will take the lead and purchase only from such businesses.”
However, PM Lee stressed that the cost of higher wages for lower-wage workers will have to be shared, not just by workers and employers, but consumers as well.
“Pay a little bit more for some of our favourite things, like bubble tea or bak chor mee, with or without hum (cockles), to help the shop cover higher cleaning and waste collection costs.
“I am glad that many Singaporeans are willing to support lower-wage workers in this way. It will not only enable the workers to keep their jobs at higher pay, it will also show that as a society, we value their work and contributions, and that they are part of us,” he remarked.
Govt revealed last Nov that over 50,000 S’poreans earn less than S$1,300
Last year in November, Workers’ Party (WP) Member of Parliament (WP) Jamus Lim had asked in Parliament how many locals are making less than S$1,300, an amount that the alternative party has called for the government to implement as a universal minimum wage.
In response, Senior Minister of State for Manpower Zaqy Mohamad said close to 52,000 Singaporeans take home a monthly salary of less than S$1,300, which is inclusive of Workfare cash supplements and after deducting their contribution to the Central Provident Fund (CPF).
Mr Zaqy revealed that the amount includes 30,000 full-time Singaporean employees working in sectors like food services, cleaning and retail, as well as 22,000 self-employed workers.
To explain further on the figures, Mr Zaqy noted that four in five of these Singaporeans have post-secondary education as their highest qualification and more than a third of them are aged 50 and above.
As such, this shows that low-wage workers are those in the older age group and have a lower education profile compared to the current generation, the Senior Minister noted.
He added that the low-wage workers also get a number of support from the government, which include GST vouchers and financial assistance under ComCare.
Additionally, Mr Zaqy asserted that Singapore follows the International Labour Organisation’s (ILO) definition of earnings, and this includes employee contributions to social security and pension schemes.
This means that calculations have to include CPF and Workfare contributions as these can be used for housing and healthcare needs, he explained.
“I think it’s worth to note that 75 per cent of our Workfare recipients, lower-income workers, also own their own homes and therefore there’s a direct impact from CPF into your home ownership,” Mr Zaqy said.
He went on to state that most minimum wage systems overseas – including in the United States and the United Kingdom – are subject to taxes and social security contributions.
For those who are not aware, Workfare scheme was first introduced in 2007 to offer lowe-income Singaporeans with cash payouts and CPF top-up in order to encourage them to keep working and save for retirement.
Following that, Dr Lim, who is MP for Sengkang GRC pointed out, “The ILO has a particular definition but I’m sure that he will also appreciate that for a worker that works full-time in Singapore, they will have a notion of how much their labour effort is worth every month.”
Two months prior to that, Dr Lim was questioned by seven Members of Parliament over the Workers’ Party’s proposal of minimum wage in its General Election Manifesto.
Senior Minister Tharman, not known to play to the gallery, told Mr Lim to avoid “strawman arguments” like saying the government is only interested in efficiency, not equity. “That’s frankly laughable,” he put it bluntly.
Workers’ Party reiterates position on minimum wage
WP had also earlier issued a statement — prior to the NDR — to repeat the calls made by the party, both in its GE2020 manifesto and speeches made by its Members of Parliament (MPs) over the past decade.
In a Facebook post on 27 Aug, the party said that it welcomes the recent signals from high-ranking government figures on the Government’s openness towards implementing much-needed reforms in key areas of public policy, such as a national minimum wage, redundancy insurance, and anti-discrimination laws.
It highlighted a few policy ideas which it had recently advanced.
The ideas are including: Implement an across-the-board minimum wage, implement a redundancy insurance scheme to provide pay-outs for those who are involuntarily unemployed, avoid a GST hike, introduce anti-discrimination laws, and review the existing framework for public housing.
Just a day before WP’s announcement, National Trades Union Congress (NTUC) made a suggestion to provide more support — in the form of payouts — to mature professionals, managers, and executives (PMEs) as long as they can prove that they are actively seeking for job employment.
It also called for harsher penalties to be imposed on companies that continue to discriminate against PMEs based on their age and nationality.
These two suggestions were made by NTUC, as part of a task force formed by NTUC and the Singapore National Employers Federation (SNEF), after talking to PMEs about their concerns.
