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1. How will the lower-wage workers be impacted?

2. What other support do lower-wage workers need?

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Would you be willing to pay a little more if that price increase meant lower-wage workers would benefit? Why or Why not?

How much more are you willing to pay?

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1. What challenges might companies face?

2. What benefits will companies enjoy?

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1. What are the factors that the government need to consider when raising the wages of lower wage

workers?

2. What are the trade-offs?

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Listen actively and attentively.

Ask for clarification if you are confused.

Do not interrupt one another.

Challenge one another, but do so respectfully.

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TODAY looks at the differences between a classic minimum wage model and the one Singapore is adopting

In short, local qualifying salary helps determine how many foreign workers a firm can hire

A minimum wage system would cover everybody, irrespective of employer or job

Still, experts said the latest changes announced by Prime Minister Lee Hsien Loong largely meet the objectives of a minimum wage

The changes directly affect 82 per cent of lower-wage workers, but it would lead to a "spillover benefit" to those who are not covered, they said

SINGAPORE - Prime Minister Lee Hsien Loong announced in the National Day Rally on Sunday (Aug 29) a new requirement for firms that hire foreign workers to pay all their Singapore employees a "local qualifying salary" of at least S$1,400 a month.

Is it right, then, to broadly interpret the news as the introduction of a national minimum wage?

What are the fundamental differences between a "universal" minimum wage model - also what the Workers' Party has called for - and the hybrid progressive wage model-local qualifying salary model that Mr Lee said would be adopted here?

TODAY spoke to economists and academics to find answers to these questions, as well as understand what they foresee would come out of the chosen model, as opposed to Singapore implementing a minimum wage in the traditional sense of the word.
What is a local qualifying salary and why is it needed?
The local qualifying salary is not a minimum wage.

It is a wage threshold that the Ministry of Manpower (MOM) had imposed on firms that hire foreign workers to prevent Singapore workers from being employed on "token salaries" to allow the employer access to foreign workers.

Each firm has a work permit or S Pass quota and this varies across industries, ranging from 35 per cent in the services sector to 87.5 per cent in the construction and process sectors.

A work permit for migrant workers allows foreign semi-skilled or unskilled labourers from approved countries to take up jobs in sectors such as services, construction and manufacturing. An S Pass is for mid-level skilled foreign workers who earn at least $2,500 a month.

For instance, a firm in the services sector with a headcount of 120 needs to pay 65 Singapore workers at least S$1,400 - the current local qualifying salary - to be able to hire 35 foreign workers. Another 20 Singapore workers can be paid below the local qualifying salary and they will not be included when the quota is calculated.

This is how calculations are made:

1 local qualifying salary count = A Singapore employee who earns the local qualifying salary of at least S$1,400 a month

0.5 local qualifying salary count = A Singapore employee who earns at least half the local qualifying salary, between S$700 and S$1,400 a month

What will change?
From September next year, firms that hire any foreign worker must pay all their Singapore workers an local qualifying salary at the minimum, which will be set at S$1,400 a month for full-time workers and S$9 an hour for part-time workers.

This means that the firm in the example above needs to pay all 85 Singapore employees at least S$1,400 in order to hire foreign workers.

This is one of 18 recommendations from a workgroup comprising the Government, unions and employers studying how lower-wage workers can get more help, and the Government has accepted its proposals.

Another was an expansion of the Progressive Wage Model to cover more industries and occupations. The wage model sets out minimum pay requirements for workers at different skill levels and mandates wage increases in tandem with workers' training and skills.

With the change, the Progressive Wage Model, which is now only applied to four industries - cleaning, security, landscaping and lift maintenance - will apply to all administrators and drivers as well, ensuring that they are paid at least S$1,500 and S$1,750 a month respectively from March 2023.
Do these not impose minimum wages across the board?
Not really. The tripartite workgroup estimates that the local qualifying salary will cover about 99,000, or 35 per cent, of the 283,000 lower-wage workers - defined as income earners in the bottom 20th percentile - in full-time employment here.

Together with the Progressive Wage Model, 82 per cent of these full-time lower-wage workers will be covered under some form of wage floor.

A classic minimum wage system would apply in the same way to workers across all sectors. It usually involves the enactment of a law mandating that the minimum wage to be paid to any worker is a certain pre-specified amount.

Mr Terence Ho Wai Luen, Associate Professor in Practice at the Lee Kuan Yew School of Public Policy, said that instead of this, the current adjustments are done through "administrative levers" such as foreign worker access.

Dr Kelvin Seah Kah Cheng, senior lecturer in the National University of Singapore's Department of Economics, said that the Progressive Wage Model is not applied uniformly across all occupations and sectors. Instead, the structure of wages is set differently, by sector.
Who will be left out?
About 50,000 full-time lower-wage workers who are not covered by progressive wages and do not work in firms that hire any foreign workers.

The workgroup states that a vast majority of them work in very small firms, such as hawker stalls and heartland shops, that are often family businesses hiring fewer than 10 workers, adding that they are usually not covered by minimum wage systems in other countries anyway.

Dr Walter Theseira, an associate professor of economics at the Singapore University of Social Sciences, said the jobs that are not covered with a baseline salary would likely involve general shop and sales assistance or general labour.

If they had involved higher skills, chances are that the salary would already be above S$1,400 and hence a baseline wage would not be of concern, he pointed out.
But will the end result be more or less the same?
The experts are of the opinion that the expanded Progressive Wage Model and local qualifying salary largely meet the objectives of a minimum wage in that it provides an effective wage floor for the vast majority of lower-wage workers, which would also affect a "spillover benefit" to those who are not covered.

Dr Theseira said: "I do not think there is going to be a practical difference between what the Government proposes and a universal minimum wage model with exemptions for micro-enterprises, and negotiated job or sector minimum wages.

"That's pretty much the same thing."

Workers who are not covered, he added, will have the option of looking for a job covered by the Progressive Wage Model or local qualifying salary, since the skill requirement among the lower-wage jobs is expected to be similar.

He noted that there will still be the possibility of some jobs continuing to pay below the amounts set by the Progressive Wage Model or local qualifying salary as workers may value them for various reasons, including familiarity with the employer, work arrangements, proximity to home and flexibility.

But "having the flexibility here doesn't harm anyone as long as workers can find higher paying jobs if they want", he said.

Mr Ho said that enacting a minimum wage by legislation would have pulled up wages more quickly, but Progressive Wage Model allows for tripartite consensus and sectoral customisation, which can provide some assurance against Singapore job losses, particularly for the more vulnerable segment of workers.

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Explainer: Why 'local qualifying salary' is not another word for minimum wage

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SINGAPORE - Prime Minister Lee Hsien Loong announced in the National Day Rally on Sunday (Aug 29) a new requirement for firms that hire foreign workers to pay all their Singapore employees a "local qualifying salary" of at least S$1,400 a month.

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SINGAPORE: In 2015, Ms Jasmine Hussain watched a documentary titled Cowspiracy: The Sustainability Secret, which showed how animal agriculture had become the leading cause of deforestation, water consumption and pollution, and an even greater emitter of greenhouse gases than the transportation industry.

The film opened her eyes to the environmental impact of livestock production, and set her off on the journey towards becoming an ethical consumer.

"I kind of made the decision to go vegan overnight after watching it ... It was the least I could do since I was studying ecology and environmental science," said Ms Hussain, who was then a 19-year-old undergraduate at the University of Edinburgh in Scotland.

Changing her consumption habits even further after that became a "very natural transition" for her, she said. It was also made easier by the fact that such behaviour was seen as the norm among her like-minded classmates.

"If I was already being vegan and conscious about my eating habits, I was also going to be conscious about my spending habits as well, and be willing to spend a bit more on going to the zero-waste stores," added Ms Hussain, who is now 25 and works in the green finance industry.

Zero-waste stores operate in a similar fashion as regular grocery stores, but they do away with excessive packaging by encouraging patrons to bring their own containers and buy only the amounts they need.

Some also sell organic produce and products that are touted to be more environmentally friendly, though often at higher prices.

The ready availability of such stores in Edinburgh had made it easier on the wallet for Ms Hussain to sustain her lifestyle, as the "price range was more affordable" compared to what she found when she returned to Singapore in December last year.

Nevertheless, Ms Hussain has continued with this lifestyle and is part of a nascent but growing group of ethical consumers in Singapore.

Ethical consumerism is broadly defined as buying products and services produced in a way that minimises social or environmental damage, or both. This could range from buying cosmetic products that are free of animal testing to buying only from companies which pay their workers decent wages.

While combining ethics and shopping can be a rewarding experience for some, there are those who are not ready to embrace it yet since the price tag attached to such purchases is often perceived to be higher than normal.

Though the presence of stores selling sustainable alternatives in Singapore is not as widespread as what Ms Hussain had encountered in Scotland, various businesses in this sector said that they have witnessed a sharp growth in demand.

Ms Florence Tay, the co-founder of Singapore's first zero-waste grocery store UnPackt, said that when she and her business partner Jeff Lam started their business at Sembawang Hills Estate in 2018, knowledge about sustainable consumer practices was limited.

"At that point of time, people were only aware about the problems caused by single-use straws and plastic bags," she said.

In the months prior to the store's opening, a heartbreaking video of sea turtles with straws stuck up their nostrils had gone viral, sparking a global debate about the environmental problems caused by plastic products.

UnPackt has since seen its customer base grow by at least 30 per cent, estimates Ms Tay, who declined to provide specific numbers.

Likewise, bigger competitors such as Scoop Wholefoods - which originated from Sydney, Australia - has seen its number of outlets multiply since it set up shop here in 2019.

"The demand has grown significantly over the last two-and-a-half years with more and more people wanting to be a part of our zero-waste mission," said Mr Vishesh Juneja, the chief executive officer of Shopping Bag, a company under the Singapore-based lifestyle group Gill Capital which manages Scoop.

Scoop has expanded from its lone store at Tanglin Mall to six outlets now, with another two scheduled to be opened later this year.

Conversations about sustainable living in Singapore have been ongoing for some time, though it was only around 2015 that community groups started forming, according to Mr Mayur Singh, the co-founder of the Green Collective, a store located at Funan mall that curates sustainable brands.

Meanwhile, developments around the world in recent years have given even greater impetus to such discussions.

For instance, Swedish teenager and environmental activist Greta Thunberg first came into the global spotlight in 2018 for walking out of class on Fridays to protest in front of the Swedish parliament about her government's inaction over climate change.

On Sep 20 the following year, Ms Thunberg led the Global Climate Strike, a worldwide movement to protest against what youths perceived as a lack of effort from their respective governments to tackle the climate crisis.

This, in turn, led to the inaugural Singapore Climate Rally at Hong Lim Park a day later, which was held in solidarity with Ms Thunberg's movement.

The COVID-19 pandemic has also affected global awareness about environmental issues, based on a 2020 survey of about 3,000 people across eight countries.

The survey was conducted by the management consulting company Boston Consulting Group. It showed that about seven in 10 respondents were now more aware, compared with before the pandemic, that human activity threatens the climate, and that degradation of the environment, in turn, threatens humans.

It also found that 40 per cent reported that they intend to adopt more sustainable behaviour in the future, which includes reducing household energy consumption, increasing recycling and composting, and buying locally produced goods.

The Singapore Government, too, has also stepped up its efforts to promote a more liveable and sustainable future here, through initiatives such as its Zero Waste Masterplan unveiled in 2019, and the announcement of the Singapore Green Plan 2030 this year.

Pointing to the Climate Index published last month by OCBC Bank and digital media company Eco-Business, Mr Singh said he was happy to see discussions on the environment and sustainability "becoming more mainstream".

The index, which was based on a survey of 2,000 Singaporeans between the ages of 18 and 65, had asked the respondents, among other questions, to rank which of the five key areas unveiled under the Green Plan was the most important to them.

It found that eight in 10 respondents ranked "sustainable living" as the most important, followed by "energy reset" (61 per cent), "city in nature" (55 per cent), "green economy" (54 per cent) and "resilient future" (49 per cent).

The index also gave Singaporeans a score of 8.3 out of 10 on sustainability awareness - that is, they were aware of almost all environmental issues.

However, it also found that Singaporeans scored only 6.5 and 5.6 when it came to adopting green practices and advocating them, respectively. This meant they only did it some of the time, and advocated some of these issues and practices to their families and friends.

While ethical consumption is growing in Singapore, it has yet to become a norm here, unlike in countries such as Australia, Canada and the United States.

Dr Jimmy Wong, a senior lecturer at the School of Business at the Singapore University of Social Sciences (SUSS), said that Asian cultures "tend to be more interdependent and collectivistic".

What this means, he said, is that Singaporean consumers tend to follow social norms, and at present, it is still not the norm for most to consider whether a product is sustainably or ethically sourced before making a purchase.

Instead, consumers here are by and large pragmatic and cost-conscious when it comes to consumption, said Assistant Professor Stephanie Lin from the business school INSEAD.

"It is my impression that, in general, your average Singaporean is less concerned about ethical consumption than in other parts of the world, like the West," she said.

If two products - one "green" and one not - are priced the same, which option would you pick? But what happens when buying sustainably means a 10 per cent difference in price? The Climate Conversations chats with a Nanyang Business School observer:

THE SOCIAL MEDIA FACTOR

Still, Asst Prof Lin believes that younger consumers here are gradually becoming more ethically minded, and they want to connect more with the brands that they consume.

"This is partially due to a global trend of brands becoming more socially responsible; they are using more sustainable materials, ensuring ethical labour sourcing, connecting with social issues like racial equality, and often contributing part of their sales to other good causes," she said.

The other factor is the role which social media plays in influencing younger shoppers, said the experts interviewed.

Associate Professor Ang Swee Hoon, from the National University of Singapore's (NUS) Business School, said social media has helped to amplify consumers' views of not only brands, but also ideas and movements, as well as accelerated the role of word-of-mouth communication.

Asst Prof Lin added that social media also gives brands a more direct connection to their consumers, and allows emotional relationships - instead of just functional ones - to be established.

During the course of her research, Asst Prof Lin found that consumers like to share content on social media that is in line with their personal values, so that they can display their "best selves" to the world.

"Consumers sharing about their support of ethical brands to each other further perpetuates ethical consumption as a growing norm," she said.

Social media also gives consumers a voice to speak out against unethical practices of organisations, allowing them to informally police brands.

"For instance, when certain organisations in Singapore were found to be underpaying employees, people posted about it on social media, spreading the word about the brands' unethical practices and affecting brand equity," she said.

While Asst Prof Lin did not single out any company, media reports of homegrown bakery chain Twelve Cupcakes underpaying their employees had resulted in widespread backlash online, with some calling for a boycott of the business.

"Firms are sensitive to optics right now. Sometimes, big campaigns backfire, with ads getting pulled for being insensitive or brands being criticised for greenwashing, causewashing or hypocritical behaviour," said Asst Prof Lin.

She added: "It seems like a lot of firms have learned the lessons of these pitfalls. That's why you see firms engaging in responsible behaviour, like donating to good causes, without loudly advertising and seeking recognition for it - this can lead to greater brand loyalty."

Mr Melvin Yong, the president of the Consumers Association of Singapore (CASE), pointed out that businesses which do not respond and adapt to consumer preference are likely to lose out in the long term.

Noting the "dynamic" relationship between consumers and businesses, Mr Yong, who is also the Member of Parliament for Radin Mas, said: "Consumer behaviour can be shaped by what the marketplace is offering, and consumers can collectively effect change in the marketplace by exercising their right to choose."

VOTING WITH THEIR WALLETS

As a show of loyalty to their preferred brands that are aligned with their ideals, some consumers vote with their wallets, said NUS' Assoc Prof Ang, even if the benefits are sometimes not evident until further down the road - such as in the case of climate change.

"So while it may appear not pragmatic (due to the higher pricing) in the immediate future, consumers, especially the Gen Zs, have longer-term ideals. Being younger, their actions today may well affect their life in the future," she said.

Indeed, such an outlook was reflected in Ms Hussain and other younger consumers who are trying to make sustainable consumption part of their lifestyle.

Ms Hussain's friend, Ms Natalie Tan, 25, said her decision to embark on a sustainable lifestyle was partially influenced by Ms Hussain, and in part by what she had learnt while studying about global health and the environment.

"I don't want to contribute to capitalism, and also harm the environment," said Ms Tan, who recently graduated from the Global Studies programme at NUS.

Ms Tan said she would rather pay more for a certain product if she knows that it can fulfil her criteria. Apart from deciding whether she actually needs the product, she also researches whether a company pays its workers a living wage or if it practises greenwashing - that is, deceiving the public into believing it is helping the environment - and if the product is durable or not.

"Of course, it can't also be exorbitantly priced because I'm not super rich," said Ms Tan.

One example of a purchase she made with these factors in mind was a pair of durable slippers made of recycled tyres which cost her around S$60.

While she could have gotten a cheaper pair, she said this would wear out quickly and she would have ended up contributing more waste by buying another pair of slippers to replace them.

As for 26-year-old teacher Natasha Paul, she has been trying her best to reduce her meat intake due to the increasing amount of talk about ethical consumption and sustainability.

She is doing so by substituting recipes that require meat with plant-based alternatives. This has led her to think further about how else she could do her part to help the environment as a consumer.

One other way to do so would be to buy locally grown vegetable produce even though the prices might be higher than some imported ones. These local vegetables are not only fresher, but have a lower carbon footprint since they do not have to be transported over a long distance, said Ms Paul.

THE UNCONVERTED

However, not everyone shares the same consumer philosophy. Some of those who do not said that whether an item is ethically sourced or helps the environment is never a consideration in their purchasing decisions.

"I have a young family to support, so I just go for items that are value for money, or things that are on offer," said Mr Shaun Ho, a 35-year-old operations manager.

An accountant, who is also 35 and wanted to be known only as Mr Chan, said he had just bought a house and is preparing to start a family, so he needs to be more prudent with his expenditure.

He said that for example, he could not justify paying more for organic free-range eggs that "taste just like normal eggs and are of the same size".

However, advocates of ethical consumption said it is a misperception that shopping ethically is expensive.

Ms Hussain said she typically buys her staple food such as fruits and vegetables from the wet market, which are not only priced affordably but come without packaging.

She said she only visits a zero-waste store every one-and-a-half months to buy packaging-free soap and shampoo, or any other specialty products which she cannot get elsewhere. Such visits only set her back between S$20 and S$50 each time, she added.

UnPackt's Ms Tay said the idea is to buy only what one needs. As such, a customer may still end up paying less even if the price per weight for an item at a zero-waste store is more than its pre-packaged counterpart at a conventional store.

Moreover, pre-packaged items could lead to both a waste of resources and money if they are not used up entirely, she added.

Still, some consumers, such as Madam Audrey Lee, are not convinced.

Mdm Lee is an administrator of the Facebook group Taobao Addicts, where members can get help with shopping on the Chinese e-commerce platform.

As her days are busy, Mdm Lee, who is in her 50s and declined to reveal her occupation, said she "doesn't want to waste her time window shopping", let alone think about ethical consumption.

To her, it is all about convenience and pricing.

While the general perception is that younger shoppers are more aware of ethical consumption, not all from the older generation are indifferent.

For example, Madam Lee Lay Peng, 53, said she and her friends are discerning when it comes to making purchases.

Mdm Lee, who works in the information technology sector, said she is not against paying more for certain products if she knows for certain what the actual benefits of doing so are.

"Personally, I wouldn't mind paying more for food if it is homemade or prepared without preservatives, instead of being mass-produced," she said.

Mdm Lee pointed out that one reason why older consumers may be generally slower in adopting sustainable consumption habits is because many are not on social media and do not get the same amount of exposure as their younger counterparts on the importance of doing so.

"So that may be the reason why we are not part of this wave, because of the lack of awareness," she said.

OVERCOMING THE SCEPTICS

Several of the business owners spoken to highlighted the importance of creating awareness in order to change behaviour.

Mr Laurent Stevenart, Singapore's country manager at Impossible Foods, said one of the biggest barriers the firm faces is the perception by meat-eaters that plant-based meat just does not taste as good, or does not taste like the "real thing".

"In many of our product roll-outs and launches, we focus heavily on sampling, and we often say 'tasting is believing'," he said.

Ms Paul, who still describes herself as a meat-eater, said one of the hurdles she initially faced in trying to cut back on meat in her diet was that the alternatives, including the mock meat that is commonly found at vegetarian stalls, were not to her liking.

She was "not drawn into the fold" until brands such as Impossible Food and Beyond Meat introduced their plant-based meat alternatives in Singapore which better suited her taste buds.

Meanwhile, both UnPackt's Ms Tay and the Green Collective's Mr Singh spoke about the importance of outreach efforts to show the public that adopting sustainable practices is not out of reach or burdensome.

"We are not working on getting people to buy a product, we are actually getting people to buy a lifestyle ... and when they do, this causes a behaviour change," said Mr Singh.

For example, Ms Tay said: "Sometimes when I'm busy, I don't have a reusable cup with me, but I still make the effort to sit down for 10 minutes to drink my coffee (from a cafe's refillable mugs) instead of having it as a take-away order."

Mr Singh said ultimately, these outreach efforts need to be relatable and the target audience must be made to understand why there is a need to do things in a certain way.

WILL CONSUMERS PAY MORE TO HELP IMPROVE WAGES?

Amid the growing awareness of responsible consumption, another facet of the issue has come to the fore recently: Will Singaporeans be willing to pay more for products or services to improve the wages of low-income workers, such as those in the retail, and food and beverage industries?

In announcing several measures to uplift such workers during his National Day Rally on Aug 29, Prime Minister Lee Hsien Loong noted that the cost of higher wages for them will have to be shared, not just by workers and employers, but consumers as well.

"So all of us, as consumers, must also chip in. Pay a little bit more for some of our favourite things, like bubble tea or bak chor mee to help the shop cover higher cleaning and waste-collection costs," he had said.

Over the years, there have also been spirited public discussions on whether hawkers should charge higher prices to improve their lot.

Most consumers interviewed generally felt that they would only be prepared to pay more if they know for sure that the additional amount they pay goes directly to the workers.

Others said they are concerned about how it will affect their cost of living.

Among those who said they would pay more was Ms Tan, who said she has always wondered why hawkers price their food so cheaply.

"They have to wake up early every day and put in so much effort to make that one dish," said Ms Tan, adding that they ought to be better compensated for their efforts.

Nevertheless, she acknowledged that this would raise the cost of living especially for low-income families, and suggested that those who can afford it should sponsor meals for the needy.

SUSS' Dr Wong said the idea of paying more to create an inclusive society is an abstract idea that will be hard for most people to connect to. "They will say, 'You're telling me if I pay 20 or 50 cents more for my bak chor mee, the uncle at the coffee shop downstairs will be better off?'" he said.

To gain the acceptance of consumers, CASE's Mr Yong said businesses not only need to show that any additional premium paid by their customers goes towards supporting the welfare of these workers. There must also be discernible improvement in the services over time, he added.

"At CASE, my view is that businesses should not see this as an excuse to raise prices without justification. CASE will not hesitate to act against businesses who take this as an opportunity to profiteer," said Mr Yong.

Instead of passing on the cost to consumers, Dr Wong said that a better idea would be for companies to cut costs on unnecessary areas - overly elaborate packaging for example - and channel that difference towards the workers' salaries instead.

INSEAD's Asst Prof Lin described Singaporean culture as very "communal".

"On the one hand, Singaporeans are very concerned about doing their civic duties and being responsible members of the community," she said. "On the other hand, it may be difficult to think about low-income workers as part of their immediate community that they have a responsibility to help."

She added: "Humanising low-income workers and emphasising their part in a local or global community might be helpful in increasing empathy to low-income earners."

In any case, Associate Professor Hannah Chang, from the Lee Kong Chian School of Business at the Singapore Management University, said it generally takes "a lot of time and discussion" to result in any meaningful change in consumer attitudes and behaviour.

"We can see that over the years, consumers have started caring more about the environment and social causes," she said.

"Similar to how the importance of sustainability and green consumption have been highlighted ... if people can be shown how they can play a part in (uplifting wages) by paying just a bit more with each purchase, it's more likely that people will start showing a buy-in."
For more news like this, visit todayonline.com.

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The Big Read: The rise of the ethical consumer - can it uplift low-wage workers too?

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SINGAPORE: In 2015, Ms Jasmine Hussain watched a documentary titled Cowspiracy: The Sustainability Secret, which showed how animal agriculture had become the leading cause of deforestation, water consumption and pollution, and an even greater emitter of greenhouse gases than the transportation industry.

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Boost for lower-wage workers, short-term pain for businesses: Analysts on new support measures

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SINGAPORE: Newly announced support measures for lower-wage workers signal a “cohesive” shift in policy, but the devil could be in the speed and details of implementation, analysts said.

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Support measures for our lower-wage workers, through progressive wages, Workfare, Workcare and Workright.

As a fair and inclusive society, we must accord our lower-wage workers with dignity and respect, as well as provide them with pathways to progress. This requires a whole-of-society effort, with support from the government, employers, unions, service buyers, and fellow Singaporeans.

Through the Tripartite Workgroup on Lower-Wage Workers, we are working closely with our Tripartite Partners to enhance the well-being of our lower-wage workers, and strengthen public appreciation for their work. We are also mobilising the community through the Alliance for Action for Lower-Wage Workers, to develop ground-up initiatives on uplifting our lower-wage workers.

Find out more about our various support measures, as summarised by the 4Ws:

Progressive Wages

The Progressive Wage Model (PWM) helps to increase wages of lower-wage workers through upgrading skills and improving productivity. It has been implemented in the cleaning, security, and landscape sectors. We are working with Tripartite Partners to expand PWM to more sectors in the coming years.

Workfare

Workfare is a broad-based measure comprising the following:

Workfare Income Supplement (WIS) Scheme

Introduced in 2007 as a permanent feature of Singapore's social security system

Rewards regular work and individual effort by topping up salaries by up to 30%

Provides cash and CPF top-ups, helping lower-wage workers meet their expenditure needs and save for retirement

Workfare Skills Support (WSS) Scheme

Formerly known as Workfare Training Support, it was enhanced in July 2020 to support lower-wage workers in undertake training that leads to more impactful outcomes

Helps lower-wage workers become more employable, and gives them a chance to earn more

Workcare

Introduced in 2019, Workcare aims to improve the work environments of lower-wage workers and strengthen public appreciation for the work that they do.

Progressive employers can tap on the Workcare Grant to provide new rest areas or enhance existing ones for their outsourced workers.

This is in line with recommendations in the Tripartite advisory on provision of rest areas for outsourced workers.

Workright

Launched in 2012 by MOM and CPF Board, Workright protects the employment rights of workers through public education and enforcement of the Employment Act and the CPF Act.

Read on to find out more about the employment laws:

For more information

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Support measures for our lower-wage workers, through progressive wages, Workfare, Workcare and Workright. As a fair and inclusive society, we must accord our lower-wage workers with dignity and respect, as well as provide them with pathways to progress. This requires a whole-of-society effort, with support from the government, employers, unions, service buyers, and fellow Singaporeans.

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In your groups key in your discussion points under the respective parties/stakeholders.

Indicate your group name in the subject title.

Include any questions that you might have for other parties/stakeholders.

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SINGAPORE: With eyes set on Singapore's post-COVID future, Prime Minister Lee Hsien Loong's National Day Rally on Sunday (Aug 29) set out the Government's plans to tackle emergent societal fault lines.

The first highlighted was the stresses on lower-wage workers (LWW).

Even before the COVID-19 pandemic swept the globe, LWWs in Singapore and elsewhere have been under considerable strain for several years now because of new technological trends, disruption and globalisation.

But the pandemic has accentuated the situation gravely, impacting sectors with huge concentration of non-PMET workers like retail, F&B and accommodation more forcefully, leaving sales, services and clerical staff most prone to retrenchment, the Ministry of Manpower's Labour Market Report 2020 pointed out.

LWWs in economically important sectors such as aviation, hospitality and tourism also lost their jobs and had to find alternative employment.

Meanwhile, many LWWs found themselves on the frontline of the societal response to the health crisis - essential workers key to keeping basic services going.

Without appropriate support, the setbacks to this vulnerable group could lead to a permanent underclass emerging, and seriously derail social cohesion and Singapore's prospects of emerging stronger from the crisis.

Such a distinct separation of society into winners and losers damages the social compact that binds a society together.

It was timely therefore for PM Lee to set out several significant steps to improve the economic security of LWWs focused specifically on their employment income.

The major policy announcements for LWWs were in three critical areas: First, an extension in eligibility for the Workfare Income Supplement Scheme (WIS). Second, several measures to expand the Progressive Wage Model (PWM) to more industry sectors and specific occupations, and third, a more comprehensive Local Qualifying Salary regime.

INCREASING TAKE-HOME PAY FOR LOW-WAGE WORKERS

When implemented in the next two years, these measures will collectively increase the take-home pay of a larger number of LWWs and potentially propel productivity gains for businesses adopting the PWM.

In particular, the extension in eligibility for WIS to workers aged 30 years and above (from the current 35-year-old threshold) increases the financial support for younger LWWs, cushioning them from the ill-effects of heightened precarity and increasing their ability to save for tough times and provide for their retirement security in the long term.

The expansion of the PWM and more comprehensive Local Qualifying Salary regime to more industry sectors and occupations will allow more workers to climb productivity-supportive wage ladders to increase their earnings, while their employers benefit from productivity gains.

The roll-out of a Progressive Wage Mark (PW Mark) for businesses employing LWWs will send a powerful signal to both buyers of goods and services as well as potential job-seekers of the alignment of accredited businesses to the goal of progressive wages for their workers.

This signal will be reinforced by the Government (a major procurer of goods and services) buying only from suppliers with the PW Mark.

PROGRESSIVE WAGES KEY PART OF SINGAPORE'S WORK LANDSCAPE

There are two take-aways from this emphasis on progressive wages in this year's National Day Rally.

The first is that the Government has decisively declared its position in the universal minimum wage versus incremental PWM debate and has doubled down on rolling out more aggressively the latter policies.

This Government has been consistent in its rejection of a universal minimum wage for Singapore, believing it will be too distortionary for the labour market and far too blunt a tool to effectively balance welfare gains for LWWs with the impact on economic dynamism.

However, with more sectors and occupations covered by PWM, and other foresighted businesses adopting such policies getting accredited with the PW Mark, de facto minimum wage floors would in any case be established by what is paid to workers in those sectors and occupations with progressive wages.

This effect would be enhanced if there are few barriers preventing workers shifting to jobs covered by PWM from those that are not.

SOCIETY PREPARED TO PAY THE PRICE

The second point was highlighted by Prime Minister Lee in his speech when he noted that higher wages would need to be accompanied by productivity gains underpinned by workers upgrading their skills and employers absorbing some of the increased costs.

While the Government can help defray some of the transitional costs of adopting PWM, a significant part of the increased costs would likely have to be shared with consumers.

This repricing of labour will lead to a gradual reset of all associated goods and services where labour is an input, and result in higher costs of living.

The Government's support of LWWs, through larger WIS payments and other schemes to promote training and skills upgrading may also necessitate increases in taxation in the future.

The Prime Minister likened WIS to a negative income tax. But these transfers to LWWs would have to be financed by higher taxes levied on those with the best ability to pay, with higher incomes or wealth.

Higher prices for goods and services as well as higher tax rates need not be a bad thing, especially if accompanied by greater productivity and the creation of better jobs.

Singapore has experienced and thrived through numerous rounds of price adjustments alongside economic growth over the past 56 years.

Although the price of most goods and services including that for standard meals like bak chor mee have increased, real incomes have also risen substantially, between five to six times in the five decades from 1965.

But if some Singaporeans continue to be unable to earn enough to sustain themselves here and lead purposeful lives, national prosperity can come at a cost to unity and social cohesion.

With the announcement of key measures to uplift the wages of LWW, which will inevitably put pressures on cost structures, society has to agree on the price to pay to ensure the lowest rungs of our workers are duly protected.

We will need to accept the accompanying higher prices and taxes if we are to value each person in Singapore fully so that no one is willingly left behind, to ensure a shared future with happiness, prosperity and progress for everyone in our nation.

Christopher Gee is Senior Research Fellow at the Institute of Policy Studies, National University of Singapore.

This piece was first published in CNA on 1 September 2021.

Top photo from Unsplash.

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commentary: value placed on low-wage workers is a price singapore should pay for shared future

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Commentary: Value placed on low-wage workers is a price Singapore should pay for shared future

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SINGAPORE: With eyes set on Singapore's post-COVID future, Prime Minister Lee Hsien Loong's National Day Rally on Sunday (Aug 29) set out the Government's plans to tackle emergent societal fault lines. The first highlighted was the stresses on lower-wage workers (LWW).

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1. Nominate one member to be your scribe and post the discussion on the Padlet.

2. Nominate one member to present the group's ideas during big group sharing.

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Discussion points

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Questions for (party/stakeholder):

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I would be willing to pay more if it meant lower wage workers would benefit if I have a direct connection to someone who's a low wage worker. Also, I think that it would benefit Singapore's entire economy if low wage workers had an increase in their wages, so I wouldn't mind paying a little more.

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things to consider :

that the wages are not too high that it scares employers such as MNCs away and then we have less FDI

that the wages are matched with the rising costs of living to ensure that everyone can continue to afford

that wages do not increase the cost of products and goods too much

A definite minimum wage so there are no discrepancies with the payment of minimum wage workers

A fair minimum wage that fulfils the basic necessities of minimum wage workers as well as provide surplus income to aid them with purchases of external items they want to buy in their life

trade offs:

more consumer spending

employers must be able to shoulder the increased employment costs

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challenges the company might face:
1. hving insufficient funds to pay employees or sustain the company, like upgrading of facilities etc. , if there is a minimum wage
2. if workload is super light and the minimum wage doesnt match the work they do, then would it be worth it?

benefits companies can enjoy
1. higher wages can encourage workers, increasing quality of work

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group 1:

1. no money to sustain living, low standards of living , unhappiness + left behind in country’s progress which would in turn slow entire country down

2. psychological help to sustain their mental well being, looked down on in society

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1)The government has to evaluate the current situation accordingly so that they are able to make the best decision which will benefit the most people in our society.

2)some groups of people will not  be satisfied,especially those who feel that it’s unfair,that other sectors are given a “pay raise” while there’s stagnate

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erm no i dont think so but if the government does that by increasing gst then i nothing yo say

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erm no i dont think so but if the government does that by increasing gst then i nothing yo say

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HI

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challenges companies might face:
1. companies will earn less money bc they have to distribute that money to the lower wage workers (#eattherich) and as such, companies might be angry

benefits companies will enjoy:
1. lower ses difference among workers
2. workers will have a higher quality of life, which is a good thing if the company cares about them
3. workers will be more motivated to work bc of the higher pay, and productivity levels at work will increase
4. workers will be more motivated to work and increase their skills bc of the higher pay and as such, the companies will be able to have more skilled workers and more workers w a variety if different skills

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I’m willing to pay more between a few cents to a dollar so that it’ll benefit the workers and not make me go bankrupt since I like to eat and buy stuff alot
🧧o(︶︿︶)o🧧

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make sure all employees are fairly paid

profitability of the enterprises

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No as I would expect these sort of plans or schemes to be funded through the governments use of the planned GST increase

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lower wage workers need better salary

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in a country with steep levies, it is hard to prioritise the good of the world over the good of one’s self. the practice of ethical consumerism is easier for the affluent as they can afford to pay more. the cost of living is high enough as it is, and to have to juggle between earning to live and having to change one’s way of life may prove to be challenging for Singaporeans. Thus ethical consumerism may be a bigger challenge for singapore than it will be for other countries, moving forward.

While certain measures have been put it in place to encourage this, this results in steeper levies, such as the increase in the Goods and Services tax. As seen from that policy, every action will likely have an attendant effect—the rise in gst was pushed forward to 2022-2025 due to the need to cope with the amount expended on COVID-19 countermeasures. Likewise, the progressive wage model may push companies to seek support from the government, which may cause them to increase taxes to counteract. Furthermore, companies may be forced to increase the price of their goods and services. This will result in a consequent rise in price of goods, which  may further discourage Singaporeans from practising ethical consumerism.

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grp 2:
1. less money, lower quality of life

2. emotional support

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Government is worried that if more people continue to live below a certain wages, it may create social issues due to the widen income gaps, people may generate hatred to those who earn more

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•Employers will be concerned that they have to pay more to employ workers.

•Employees concerned that their wages are not sufficient.

•Government need to make sure that while helping the lower wage workers see an increase in standard of living, companies do not make too much loses in employment. Cause that will lead to other problems.