Raising wages must include broader movement in entire society, says Josephine Teo

PWM Progressive Wage Model

Raising wages through the Progressive Wage Model must include a broader movement in society where consumers are willing to pay more and intentionally support companies that pay progressive wages.

The Progressive Wage Model (PWM) is in fact a ladder built on top of a minimum wage with wages going up as skills and productivity improve, Minister Josephine Teo explained in Parliament.

The model is currently mandated in the cleaning, security and landscape sectors.

Describing it as ‘minimum wage plus’, Mrs Teo said the Government prefers to expand the PWM over time to more sectors.

In so doing, it will take care to assess the capacity of businesses in those sectors to absorb the change, particularly that of small and medium-sized enterprises.

Progressive Wage Model Mark

As part of efforts to lift wages for lower-income workers, the Government will introduce the Progressive Wage Model Mark.

Companies that pay their workers’ progressive wages and provide job advancement pathways will be recognised with the Progressive Wage Model Mark.

Sectors like food services and retail trade have the potential to come on board, Mrs Teo said.

However, for the PWM Mark to work, there must be “a broader movement involving the entire society”, Mrs Teo said.

Be prepared to pay slightly more and support companies that pay progressive wages

“As consumers, we must be prepared to pay slightly more, and intentionally support such progressive companies by purchasing their products and services. This will spur more companies to be progressive and adopt the PWM Mark, which in turn will benefit our lower-income workers,” she said.

Dr Koh Poh Koon who spoke before Mrs Teo said, “Even as we endeavour to help low-wage workers, we must make sure a balance is struck so that ‘low-wage’ does not become ‘no-wage’.”

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4-pronged approach to uplift low wage workers

The approach to uplift low wage workers must be a holistic one, Mrs Teo said.

The Government’s preferred approach has 4 prongs, said Mrs Teo.

  1. Regularly adjust Workfare to support employability while mitigating income inequality;
  2. Raise wages in PWM sectors at an appropriate pace;
  3. Expand PWM over time to more sectors and assessing the capacity of businesses to absorb the change;
  4. Raise standards of living through skills acquisition, homeownership and access to quality and education.
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