MPs suggest better pay for essential low-wage workers, unemployment insurance during Budget debate

SINGAPORE: More should be done for low-wage workers in essential sectors, as well as people who have lost their jobs amid the COVID-19 economic fallout, said Members of Parliament representing the labour movement on Wednesday (Feb 24), the first day of the Budget debate. 

There were also calls to expand the progressive wage model to more industries and for the Government to raise subsidies to boost the hiring of locals.

On the progressive wage model, MP Koh Poh Koon (PAP-Tampines) said the labour movement hopes to see it implemented in six more sectors - waste management, retail trade, food services, pest management, solar technology and strata management. The policy is designed to raise the salaries of low-wage workers by upgrading their skills and increasing their productivity.

READ: Singapore could expand progressive wage model to retail sector

The Government previously announced that the progressive wage model will be incorporated among waste management providers, and authorities are looking at introducing it to the retail and food sectors as well. 

Mr Koh, who is the National Trades Union Congress’ (NTUC) deputy secretary-general, said the union will submit a pest management progressive wage model proposal to the Ministry of Manpower by the middle of this year. The scheme will likely cover around 3,000 workers.

Low-wage workers’ salaries need to be raised at a faster rate, he added, pointing to the wage gap between earners at the 20th percentile and those at the median. 

In Singapore, workers at the 20th percentile earn only around half of what those at the median take home, compared to workers in OECD countries where their salaries are at least two-thirds of what median income earners take home.

“Our sisters and brothers in the bottom 20 per cent should not become a social underclass,” Mr Koh said, adding that he hopes the gap can be closed in the next five to 10 years. 

He said that consumers are willing to pay higher prices if their extra money went to low-wage workers, citing separate surveys conducted by NTUC and the Sunday Times last year. 

Dr Koh also proposed the creation of a vocational progressive wage model for lower-wage jobs that cut across multiple sectors such as clerks and logistics drivers. 

Officials could repurpose the Wage Credit Scheme - where the Government co-funds wage increases -  to help companies cope with higher salary costs, he said. 

In response to MP Gerald Giam’s (WP-Aljunied) questions on how many workers will be covered by the vocational progressive wage model, the number who will still earn less than S$1,300 after all the proposed wage models are introduced, and whether self-employed and daily-rated workers will be included, Mr Koh said these issues are being worked out.

Echoing Leader of the Opposition Pritam Singh’s (WP-Aljunied) call to raise the salaries of essential service providers like waste disposal and transport workers, in line with the pay raise healthcare professionals will receive, MP Fahmi Aliman (PAP-Marine Parade) said essential workers should receive better pay as COVID-19 has highlighted the value of people like cleaners and security officers. 

“These everyday heroes stepped up despite the risks to their health and took on extra duties such as the additional sanitisation of high-touched surfaces and temperature screening so that we can safely continue with our lives,” said Mr Fahmi, NTUC's director of operations and mobilisation

The Government could increase low-wage essential workers’ workfare payouts “to acknowledge their social value and the hardship faced in their line of work”, he added.

READ: PAP MPs call for faster roll-out of progressive wage model, higher workfare payouts for essential workers

UNEMPLOYMENT INSURANCE SHOULD BE CONSIDERED

MP Patrick Tay (PAP-Pioneer) said it is timely to consider introducing a transitionary insurance, or unemployment insurance, to help workers who have lost their jobs.

Such schemes have worked well in countries such as Germany without excessively burdening governments, employers or employees, said Mr Tay, who is NTUC assistant secretary-general.

He noted, though, that there is a need for a “deeper dive” into the mechanics of implementing such a scheme.

“There are important considerations such as the trigger event, premium amounts, duration, and amount of pay-outs, whether it should be made compulsory to avoid self-selection, how we price the risk, the need for a critical mass or universality and whether it is to be implemented by any of our tripartite partners or all three partners together or by a private sector entity or a social enterprise,” he said. 

Mr Tay suggested that an insurance or finance tech start-up could be responsible for coming up with such a scheme, together with the “strong support” of tripartite partners, especially the Government, in the form of seed funding and co-funding.

READ: Singapore’s labour market shows signs of recovery as unemployment rates fall for second straight month

Nominated MP Hoon Hian Teck said such a national unemployment insurance scheme could act as an alternative to the Jobs Support Scheme once it ends.

Professor Hoon - who is dean of the Singapore Management University's school of economics - noted though that the provision of such unemployment benefits could increase the duration of unemployment, as they would allow workers to hold out for longer before taking on a job. 

“On the other hand, having such an insurance scheme enables workers and their dependents to have access to cash to finance their consumption when breadwinners lose their jobs for an extended period,” he said. 

Further study is needed to examine whether such a scheme is warranted in the event of future “long and deep” recessions, he added. 

PROTECTING THE SINGAPOREAN CORE

Various MPs also called for measures to protect the Singaporean core.

NTUC assistant secretary-general Desmond Choo (PAP-Tampines) called on the Government to raise Jobs Growth Incentive subsidies - designed to encourage firms to hire locals - for workers aged 62 and above.

“These workers are more prone to cyclical and structural changes. Furthermore, they are more likely to not be re-employed as companies seek to reduce costs. This will help companies to continue to hire older workers even during uncertain economic times,” he said. 

Earlier, Mr Tay called for stricter enforcement against errant companies with a weakening Singaporean core. 

He singled out “triple weak” firms - those with a highly disproportionate number of foreign professionals, managers and executives (PMEs) and with a weak commitment to nurture and strengthen their Singaporean core.

Mr Tay also said anti-discrimination legislation could be considered to address discriminatory practices relating to issues such as age, gender, disability and race. 

“Such a legislation could send a stronger signal than the current tripartite standards and guidelines, to send a clear deterrence, give TAFEP (Tripartite Alliance for Fair and Progressive Employment Practices) wider powers, and eradicate all forms of discrimination and discriminatory practices at workplaces by employers as well as employment agents or agencies,” he said. 

ASSESSING BUDGET MEASURES

Both Mr Singh and Progress Singapore Party’s Non-Constituency MP Hazel Poa called on the Government to review the measures that have been rolled out to bolster the pandemic-hit economy.

“S$100 billion (in Budget measures committed last year) is not a small amount. We ask for a cost-benefit analysis of each scheme put in place. We recognise that it is not easy coming up with measures within a short timeframe to deal with a pandemic. So we ask not for a perfect solution, but an honest and transparent assessment and review,” said Ms Poa. 

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Pointing to the SGUnited Jobs and Skills Package, which was allocated an additional S$5.4 billion this Budget, Mr Singh said the weekly jobs situation reports should provide information about how funds issued to the programme has been used.  

“The effectiveness of the Government measures should be readily determinable. Without such scrutiny, a perception may crystallise of large sums of money being deployed to address an issue for which effectiveness is hard to establish,” he said. 

The Budget debate continues on Thursday.