Ensuring Workers Not Covered by Progressive Wage Models and Local Qualifying Salary Scheme Will Earn Monthly Salary of At Least $1,400

27 Mr Gerald Giam Yean Song asked the Minister for Manpower (a) how many workers earning less than $1,400 per month are currently working in firms with over 10 employees and no foreigners; and (b) how will the Ministry ensure that these workers earn at least a minimum wage of $1,400 per month after 1 September 2022, given that the requirement to pay the Local Qualifying Salary does not apply to such firms.

28 Mr Gerald Giam Yean Song asked the Minister for Manpower how will the Ministry ensure that the estimated two in 10 workers not covered by the Progressive Wage Model by 2023 will be able to earn a minimum wage of $1,400 per month.

Dr Tan See Leng: Last year, the Government accepted the recommendations by the Tripartite Workgroup on Lower-Wage Workers to expand Progressive Wages to more sectors and occupations, and to require employers hiring foreign workers to pay all their local workers at least the Local Qualifying Salary (LQS), which is currently $1,400. These measures will start from September 2022 onwards, and will cover 234,000 or eight in 10 full-time lower-wage workers.

Of the remaining 50,000 lower-wage workers not covered by Progressive Wages or LQS, 27,000 of them already earn $1,400¹ or more a month. For those who earn less than $1,400 a month, the vast majority are employed in firms with less than 10 employees. These firms include small family operations such as hawker stalls and heartland shops. Only about 2,000², or less than 1% of all full-time lower-wage workers, earn less than $1,400 a month and are employed in firms with 10 or more employees and do not hire foreign workers.

The Member has asked how the wages of this group of workers would be uplifted. As outlined in the report of the Tripartite Workgroup on Lower-Wage Workers, and reiterated in the Ministry’s parliamentary response in September 2021, this group of workers should nevertheless still see meaningful increases in their wages over time due to market forces, as wages of other lower-wage workers increase. For example, with the recently announced enhancements to the Cleaning and Security PWMs, entry level cleaners will see cumulative wage increases of up to 84% from 2022 to 2028, and receive baseline wages of about $2,400 by then. For entry level security officers, they will see cumulative increases of up to 56% and receive a baseline wage of about $3,500 by 2028. The PWMs will continue to set the pace for many sectors as more PWMs are implemented in 2022 and 2023.

The Government will also be enhancing the Workfare Income Supplement Scheme. Lower-wage workers of all occupations currently receive cash and CPF top-ups of up to $4,000 a year from Workfare. As announced by the Prime Minister at National Day Rally 2021, the Government will be raising Workfare payouts for all recipients from 2023. More details will be announced at Budget this year. In addition, the Progressive Wage Mark would provide an additional incentive for their employers to pay them Progressive Wages where applicable, as employers will be publicly recognised as progressive employers. The Government will also take the lead to require its suppliers to obtain the PW Mark.