Progress made in helping low earners most affected by ‘cheap-sourcing’

February 24, 201410:18 am416 views
Progress made in helping low earners most affected by ‘cheap-sourcing’
Progress made in helping low earners most affected by ‘cheap-sourcing’

JOBS in SINGAPORE — Progress has been made in lifting the incomes of low-wage workers but there is more work to do, said Finance Minister Tharman Shamugaratnam, noting that cheap-sourcing, in particular, is a problem that has required a more “interventionist” solution worked out between the Government, unions and employers.

“In industries such as cleaning and security, cheap-sourcing has held down pay and also led to high attrition, making it difficult for workers to acquire skills and upgrade themselves,” Mr Tharman said.

To tackle this, the Government last month made the Progressive Wage Model a licensing requirement for companies in both industries.

“(This) will ensure that cleaners and security guards, too, enjoy significant upgrades in their basic pay and have a pathway to improve their skills and wages over time,” he said. The model seeks to progressively raise low-earners’ salaries by increasing productivity through skills upgrading and training.

The Government will also continue to mitigate wage disparities by using tax revenues to top up the wages of those in the lowest 20 per cent through the Workfare scheme, which supplements workers’ incomes with cash payouts and Central Provident Fund top-ups.

“Wages for these workers are, in fact, going up With Workfare and the Special Employment Credit, the average older-worker Singaporean will receive wages at least one-quarter higher than what their employers will pay,” Mr Tharman said.

The three-year Wage Credit Scheme, introduced in last year’s Budget, has also helped improve the wages of lower-paid Singaporeans, he added, noting that wages for this group have improved the most rapidly.

Mr Tharman stressed the importance of having a competitive and vibrant economy. “That is the only way we can have good jobs and rising incomes for average- and lower-income citizens,” he said. “Jobs are the most important safety net and the most meaningful way we can keep society inclusive.”

The realities of global competition and technological advances that are putting pressure on less-skilled workers all over the world cannot be changed.

“But we can do so much more to improve the lives of lower-income workers and to give their children the best chances to do well, so that disadvantage is not passed from one generation to the next and our society preserves a sense of equity and opportunity,” he said.



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