We hear about Progressive Wage Model all the time in Singapore and this "newly invented system" is only found in Singapore. Wages in Singapore have always taken a double beating - influx of foreigners and absence of workers' unions. The loose labour market depresses wages and it is an irrefutable fact, whereas the absence of workers' unions is truly the real problem behind stagnated wages.
As a footing, we should not recognize NTUC as a union because its chief is your nonsense-blabbering Minister Lim Swee Say (you know terms like "betterer", "betterest", "upturn downturn" and loads of self-snook antics) The NTUC leadership is dirt filled with PAP members and PAP MPs, whose self-interests comes first. NTUC has literally done nothing for Singapore employees since inception, it is at best a supermarket, insurance company and a partisan club for PAP. Enough bashing about NTUC, the message is there is no union to represent Singapore employees.
In the past few years thanks to Lee Hsien Loong's leadership, more Singaporeans had become vocal and started protesting more actively. Even foreigners have also risen to engage in "illegal" strikes and riots flipping police cars. The series of anti-PAP social unrest eventually jerked the PAP government out of their slumber and do something about the drastically low wage culture in an increasingly high cost environment. Therefore, they came out with a wage system of what they called "Progressive Wage Model".
This wage model they claimed, is
a) far superior than the Minimum Wage system and
b) a sustainable approach to wage growth through training and the raise in productivity
However the few facts remain that:
1) Progressive Wage Model is behaving like Minimum Wage
Cleaners were the first to be given a Minimum Wage of $1000, and the PAP government has no logical explanation how did they arrive to this figure. Worse, although the PAP government harp on productivity-led wage growth, they have no instrument to measure productivity gains in the cleaning sector. It goes the same for security officers - a magical figure of $1100 Minimum Wage. This figure is some 30% increase as compared to before. Did productivity of security officers went up by more than 30%?
Minimum Wage is inflation-adjusted, Progressive Wage Model is not, so how is this "far superior than the Minimum Wage"?
The PAP doesn't know how to measure productivity and value of training, so how is this "sustainable wage growth through training and the raise in productivity"?
If Progressive Wage Model is Minimum Wage, why the big roundabout? Isn't it accurate to say that the PAP pluck these numbers from the air? Then again, since PAP can pluck numbers from the air to decide how much you should be paid, why can't they be more generous to this 2 sectors mostly taken up by Singaporean elderly workers and extend the generosity to all other sectors?
2) Progressive Wage Model does not work for Professionals
Wages of professionals, managers and engineers (PMEs) have seen similar depression due to the influx of foreigners. The unlucky ones of course have been retrenched by cheaper foreign S and E Pass holders. The PAP actually used Temasek Holdings-owned Singapore Power as the sole example to prove the sorry concept of progressive wage. Under the Progressive Wage Model, Singapore Power claimed that they can pay up to $5000 for a diploma holder with 7 years experience. This is sure one big trumpet they are blowing! In the private sector, diploma holders typically see their salaries stagnated at $3000 no matter how many years of experience they have. Especially for Small and Medium Enterprises, can they afford to pay up to $7000 for a degree holder and $5000 for a diploma holder?
Progressive Wage Model for Professionals is doomed to fail if the private sector and especially the SMEs cannot emulate Singapore Power and pay such wages. This contrasts greatly with the developed nations' model of a real trade union. A real trade union in places like Australia and Germany is managed by employees of the same trade, empowered by their government to represent their counterparts and negotiate for wages and benefits.
Like the CPF, the Progressive Wage Model is a lie that takes the form of another and never serves its purpose. If you cannot count on the CPF to retire, you can forget about counting on the Progressive Wage Model to increase your wages. If the PWM is just a populist marketing to appease public anger, the only end result when the people stopped protesting altogether will still be stagnant wages.
Alex Tan
TRS Contributor