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Uplifting lower-wage workers in Singapore: 3 areas of priority

Uplifting lower-wage workers in Singapore: 3 areas of priority

The Government will continue implementing efforts in two pillars — the progressive wage approach and Workfare measures.

Minister for Manpower Dr. Tan See Leng has highlighted and affirmed the key three areas in Singapore's approach to uplift and strengthen support for lower-wage workers.

Speaking at the Symposium on In-Work Poverty and the Challenges of Getting by Among the Young, Minister Tan set the context of Singapore's labour market today:

  1. As of early March, resident employment is 4.4% above 2019 levels, and resident unemployment rates have also recovered to pre-COVID levels.
  2. In the same timeframe, real median income growth, after adjusting for inflation, was 2.0% higher than 0.9% in 2021.

Still, he recognises the uncertain global economic environment, with challenges such as global inflation and geopolitical ahead. He then shared more on three key areas to uplift and strengthen support for lower-wage workers, and empower Singaporeans, including the young, to take care of their careers. 

Progressive wage approach

To uplift wages and provide upskilling and progression pathways for lower-wage workers, the Government will continue implementing efforts in two key pillars — the progressive wage approach as well as workfare measures. 

Starting more than ten years ago, the progressive wage approach was introduced to raise lower-wage workers’ incomes, in tandem with productivity. In this way, workers benefit from a clear career pathway for their wages to rise along with training and improvements in productivity and skills. On the other hand, employers benefit from their workers’ higher productivity and skills. Service buyers and consumers enjoy better service standards and quality.

Over the years, progressive wage models (PWM) have been rolled out for various sectors and occupations such as cleaning, security, and retail. The Government also introduced the local qualifying salary (LQS) requirement, whereby all firms that employ foreign workers are required to pay at least the LQS to all their local workers, unless they are covered by a PWM.

This year also marked an overall milestone in Singapore's journey to uplift lower-wage workers — the progressive wage mark accreditation scheme for businesses was launched in January 2023, along with the food services PWM and occupational progressive wages for administrators and drivers in March. With the introduction of the waste management PWM in July, all the recommendations of the Tripartite Workgroup on Lower-Wage Workers will be implemented.

According to Minister Tan, the suite of progressive wage moves will benefit up to nine in ten full-time lower-wage workers, significantly more than one in ten a few years ago.

The other key pillar of support for lower-wage workers is Workfare. Under the Workfare Income Supplement scheme (WIS), eligible lower-wage workers will receive cash and CPF payments to boost their income and retirement savings. The Ministry of Manpower regularly reviews the WIS, with the latest enhancements having been implemented since January this year:

  1. The maximum WIS payments have been increased to up to S$4,200 per year, from up to S$4,000 previously, and the qualifying income cap from S$2,300 to S$2,500 per month.
  2. Recognising the challenges faced by younger lower-wage workers, the eligibility age has been lowered from 35 to 30 years old.
  3. With these enhancements, over half a million lower-wage workers will benefit from WIS payments amounting to S$1.1bn, up from S$850mn previously.

The Workfare Skills Support scheme (WSS) complements the WIS, by supporting lower-wage workers to upskill to improve their employability and incomes. Minister Tan pointed out the WSS' success in supporting lower-wage workers in achieving a more impactful employment outcome. Thus, from July this year, MOM will be enhancing the WSS by lowering the eligibility age from 35 to 30 years old and raising the qualifying monthly income cap from S$2,300 to S$2,500. With these enhancements, MOM expects that 70,000 more lower-wage workers will benefit and be eligible for WSS.

Minister Tan also shared that workers who achieve Singapore Workforce Skills Qualifications (WSQ) full qualifications, including lower-wage workers, were found to be more likely to earn higher wages. An earlier study showed that on average, WSQ full qualification trainees experienced a real wage premium of 5.8% in the year after training as compared to the control group of trainees. In view of this, MOM will also be raising the Training Commitment Award for Full Qualifications from $500 to $800, to encourage lower-wage workers to undertake deeper and more sustained training.

Collectively, the progressive wage moves and workfare aim to strengthen support for lower-wage workers. According to Minister Tan, the real income of a low-wage worker grew by 4.7%, faster than the median worker at 2.0%.

Strengthening protection for platform workers

According to Minister Tan, the In-Work Poverty and the Challenges of Getting By Among the Young research by the National University of Singapore also highlighted the need to improve protection and representation for young workers in platform work, given the precarious nature of their work.

One such effort MOM has taken in doing so is to gradually align CPF contribution rates by platform companies and platform workers with that of employers and employees respectively over five years, starting from the second half of 2024. This is required for platform workers born after 1995, while other platform workers can opt-in. This will help the workers set aside CPF savings for their housing and retirement needs, as employees with similar earnings.

To ease the transition, support of up to 75% of the additional CPF contributions each year during the phase-in period will be provided for platform workers earning $2,500 or less monthly and will taper down gradually over four years.

In the fifth year when the CPF contribution rates of platform workers have been fully aligned with that of employees, MOM will then permanently increase workfare payments for eligible workers to match those for employees. This means that eligible workers could receive up to S$4,200 per year, an increase from S$2,800 per year today.

Minister Tan identifies work injury compensation as another "salient concern". To tackle this, MOM has set up a Platform Workers Work Injury Compensation Implementation Network, or PWIN to look at how the existing work injury compensation processes for employees can be adapted to provide workers with the same scope and level of compensation coverage, while accounting for the unique features of platform work.

Platform workers will also be able to seek formal representation and negotiate for their interests with the companies, as how unions do for employees. This aims to create a more balanced relationship between the workers and companies, helping to resolve workplace issues raised by workers, such as working conditions, safety at work and timely dispute resolution with customers.

"With these efforts underway, we hope platform workers will feel more assured and supported. Nonetheless, we understand that not all platform workers see this as their permanent job for the long term. Some may be doing this temporarily as they search for full-time employment opportunities. So our measures are catered to as broad a spectrum of platform workers as possible."

Forward Singapore

On this front, Minister Tan encouraged young workers who are starting out or in the middle of their careers to persist in training to upskill or reskill themselves. The Government "must also empower Singaporeans to identify the right jobs and skills that are in need in an ever-changing economy and keep abreast by undertaking the relevant training."

As part of efforts to help Singaporeans gain better awareness of their career health and prospects, MOM has progressively rolled out industry transformation maps (ITM) for 23 sectors since 2016. These ITMs help address emerging trends and opportunities and chart employees' transformation journey. Complementing the ITMs, MOM also introduced the jobs transformation maps (JTMs) in 2021 to provide detailed insights on the impact of technology and automation on jobs in each sector over the medium term. To date, ten JTMs have been completed, with eight additional JTMs in progress.

The minister then went on to highlight other key initiatives in place to support different demographics of Singaporeans in their employment and career journey, concluding: "Besides supporting workers to upskill and reskill, we also want to build a more inclusive labour market that rewards mastery of skills in different areas, with multiple pathways to success. We are partnering NTUC to look at how we can redesign skilled trades to offer better salaries and clearer career and skill progression ladders.

"We will share more details when the Forward Singapore Exercise concludes."

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Lead image / Minister for Manpower Dr. Tan See Leng Facebook

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