The incomes of Singapore’s workers at the 10th percentile increased by more than 50 per cent over the past decade to $1,517 last year, said Senior Minister of State for Manpower Zaqy Mohamad.
Full-time resident workers at this percentile had earned $1,000 in 2009, which illustrates the progress made under Singapore’s policy measures, he said.
Singapore is also progressively narrowing the income gap between its lower-wage workers and those in the middle, said Mr Zaqy yesterday, during the debate on the Government’s strategies to tackle Covid-19.
Real incomes have increased by about 30 per cent in the three sectors where the progressive wage model (PWM) has been implemented, outpacing the real income growth of 21 per cent at the median for all sectors, he said.
The PWM is a wage ladder that sets out minimum pay and training requirements for workers at different skill levels.
And for the overall workforce, including sectors that have not implemented the PWM, real incomes of full-time employed resident workers at the 20th percentile have also increased cumulatively more than the median, said Mr Zaqy.
The Government has thus far managed to lift wages while keeping unemployment low, he said, adding that it is sensitive to the risk of disemployment – workers losing their jobs. He cited studies which show the “disemployment effects” of a minimum wage could be stronger for certain groups of workers.
Scandinavian countries such as Norway and Denmark demonstrate that it is possible for nations to have a strong social compact without a minimum wage, he said. “These countries have robust dialogues between stakeholders, resulting in collective agreements on wages at the sectoral level.”
Associate Professor Jamus Lim (Sengkang GRC) said proposals about the minimum wage should not be made on the basis of individual studies. He said that the $1,300 minimum wage proposed by the Workers’ Party would fall far below the minimum wage of almost every other developed country.
In response, Mr Zaqy said his point was that academic studies on the effects of minimum wage are hotly contested, and it is difficult to come to a conclusive position based on such studies alone.
Prof Lim also pointed out that while Scandinavian countries do not have a minimum wage, that is in part because they have high unionisation rates of 70 per cent to 80 per cent, so “there is a very strong collective bargaining representation”.
Mr Zaqy said Singapore has a similar system of tripartite negotiation that has helped raise the incomes of low-wage workers. He said the Government is serious about improving the lot of low-wage workers. That is why it has set up a tripartite work group to study how to further lift their wages. It is also studying how to provide additional support to working Singaporeans, including the self-employed, should they have prolonged income loss.
Mr Zaqy also assured Mr Yip Hon Weng (Yio Chu Kang) that the Government is aware of the challenges mature workers face in changing careers. About 6,100 mid-career job seekers switched to new occupations this year with the help of career conversion programmes, he said.
Hiring is still taking place in sectors badly hit by Covid-19, Mr Zaqy added, citing tourism and retail, where business models are changing fast. “It is therefore important to not write them off,” he said.