PWM Flashcards
Goals
According to the Ministry of Manpower, PWM “helps to increase wages of workers through upgrading skills and improving productivity”.
What sectors is it implemented in?
The PWM is implemented in the cleaning, security and landscape sectors.
How does it work?
Wage ladders in each sector mandate a minimum basic monthly salary tied to the job responsibilities assigned to the worker as well as the training received by the worker.
Benefit
The PWM promises a career pathway where wages are pegged to training and productivity improvements.
Shortcoming 1 (Coverage)
The PWM is sector-specific and only applies to three sectors representing 15 per cent of workers in the bottom quintile of the wage distribution.
85 per cent of workers in the bottom quintile are not covered by the PWM.
Even within a covered sector, not all low-wage workers are under the PWM as compliance is enforced through measures such as licensing.
For example, in the cleaning industry, the PWM applies only to workers employed by licensed firms in outsourced cleaning jobs. Firms that directly employ in-house cleaners are not required to be licensed. These cleaners can thus be paid less than the minimum basic monthly salary specified by the PWM.
Shortcoming 2 (Speed of implementation)
The implementation of the PWM has been slow, possibly because reaching collective decisions requires extensive communication among stakeholders.
The PWM was introduced in June 2012; almost nine years later, only 85,000 workers are currently covered by it.
There are plans to expand the PWM to the food services and retail sectors, which will cover an additional 80,000 workers but the roll-out is projected to take two to three years.
As a result, while wages of workers in low-wage sectors have risen in the last few years, their absolute and relative wages continue to be significantly lower here than in other rich countries, even those with lower per capita incomes and lower rates of GDP growth.
Shortcoming 3
(According to an article by Channel News Asia) Since PWM applies only to Singaporeans and permanent residents, it may have the perverse impact of increasing employers’ preference for hiring foreign workers, especially since they can be selected for age, skill, physical strength, endurance and other personal qualities that can yield higher productivity at a lower wage than elderly Singaporeans in the same labour pool who will now cost more.
Supplementary feature 1 (WSS) and its benefits
1) WSS (Workfare skill support)
-> WSS encourages low wage workers to undertake training that leads to more impactful employment outcomes.
Eligible individuals may receive:
- Training allowance for selected courses that individuals had paid for themselves ($6/h)
- A cash reward for completing training
Supplementary feature 2 (WIS) and its benefits
2) WIS (Workfare income supplement)
- > Encourage eligible workers to build up their CPF savings for their retirement, housing and healthcare needs, by supplementing their income and retirement savings through cash payments and CPF contributions.
Benefits:
- As WIS encourages Singaporeans to work, you may find it easier to hire and retain locals.
- The cost of Workfare is borne fully by the Government, with no risk of raising business costs for local enterprises or causing Singaporean workers to lose their jobs. Unlike a minimum wage, Workfare is not borne by employers.
