Progressive Wage Model Could Potentially Be Implemented in the Retail Sector

Last Updated on 2021-02-26 , 10:07 am

If you’ve been following the minimum wage argument between PAP and WP over the years, you’ll understand the gist of their argument.

PAP thinks that minimum wage should be implemented but carefully so they came up with the Progressive Wage Model (PWM).

WP, on the other hand, feels that the PWM could be implemented faster.

The PWM was introduced in 2012, and throughout the years, was only implemented in three sectors so far – security, cleaning and landscape.

Well, it seems like more will be added to the list.

Progressive Wage Model Could Potentially Be Implemented in the Retail Sector

On 23 Feb 2021, Senior Minister of State for Manpower Zaqy Mohamad announced that Singapore could be implementing the PWM in the retail sector.

According to Mr Zaqy, about 45% of full-time residents in the retail sector earns, or even lesser than, the 20th wage percentile of the workforce.

Basically, the 20th wage percentile is the income that divides the bottom 20% earners from the rest of the workforce.

Due to this high-proportion of low-wage earners in the sector, the government is looking at doing something about it.

No studies have been conducted yet, he says, but more details will be given in the second half of the year.

If the PWM is implemented, it’ll affect cashiers and workers in places like supermarkets, convenience stores and fashion retail outlets.

Not An Easy Change

So, is the PWM a matter of saying, get it done, and it’ll be done?

Apparently not.

Some unique challenges that the government faces in this effort include the lack of licensing in the sector, as well as including e-commerce players.

New regulations may have to be implemented, and the sheer diversity of retail shops, from high-end ones to those in the heartlands, will have to be accounted for.

“Some will say, ‘no problem, I’m prepared to pay.’ But others, for example, those in your heartland wet markets, you (may not) want to increase costs when many of the lower-wage earners are also consumers there.”

Because, remember, if the wages in the sector increases (which is estimated to be 5%), it’s likely that the price of goods and services increases too.

Money has to come from somewhere, after all.

Meanwhile, the Singapore Retailers Association (SRA) is worried about the timing of implementation because some retailers, especially those hit hard by Covid-19, might not be able to absorb the costs.

What It Means For People in the Retail Sector

Okay, enough about the difficulties.

What is the payoff expected if PWM is implemented in the retail sector?

For one, you’re looking at a higher wage.

But the PWM is more than that.

If you recall, from this very comprehensive article we did before, the PWM increases employees’ wages by charting out a career path(s) for them.

How It Works (A Basic Explanation)

Instead of getting a pay raise of S$200 for free, what the PWM does is to set out higher job responsibilities and training qualifications for individuals to work for.

Let’s say we have a low-wage worker, Robin.

Under the PWM, Robin will be given a minimum wage of $1,000.

He will also be given a career map to look at what he wants to be and be given the chance to attend classes.

When he learns new skills, he moves upward into more “skilled” jobs, which allows him to earn even more.

So on and so forth. Kind of like a promotion and pay raise, if you think about it.

The government is hoping that, with the PWM in the retail sectors, more locals will also be attracted into the sectors.

As of now, these sectors are heavily depended on foreign workers.

Not The Only Sector On The List

So remember how we said, at the beginning of the article, how more sectors will be added to the list?

Other than the possibility of implementing PWM in the retail sector, PWN will be made mandatory in the lift and escalator maintenance sector next year.

The waste management sector is next and the food services sector is another candidate as well.

For those interested in the PAP vs WP wage argument, you can check it out here.

Feature Image: Capitaland