Low-wage F&B and retail workers to be covered under Progressive Wage Model: Zaqy

A restaurant server assisting customer with the grilling in a korean BBQ restaurant setup with various side dishes (Banchan)
A restaurant server assisting customer with the grilling in a Korean BBQ restaurant (PHOTO: Getty Images) (ADX Collections via Getty Images)

SINGAPORE — The government will expand the Progressive Wage Model (PWM) to cover low-wage workers from the food and beverage (F&B) and retail sectors, said Minister of State for Manpower Zaqy Mohamad on Wednesday (3 March).

Speaking during the Ministry of Manpower’s budget debate in Parliament, Zaqy said the PWM currently benefits 85,000 workers. In the short term, the government will be at least doubling the coverage to up to 218,000 workers, he added.

Currently, the PWM covers workers from the cleaning, security and landscape sectors.

For instance, a general cleaner who works at an office site or an F&B establishment must be paid a basic month salary of at least $1,236 for the period between 1 July 2020 and 30 June 2021. The cleaner’s wage will have to increase to at least $1,274 between 1 July 2021 and 30 June 2022.

The F&B and retail sectors are among the sectors with the largest numbers of low wage workers. The revised PWM could cover up to 80,000 local workers, Zaqy said.

The tripartite cluster committees for each of these sectors have been convened and they will recommend an implementation timeline. The committees will target to submit their recommendations on the timeline and other implementation details to the government by the end of the year, Zaqy said.

While some companies are doing well, others are still in an early recovery stage, Zaqy told the House.

“So our intentions must therefore be carefully calibrated. It must be meaningful for the workers but it must also be viable for SMEs. So we will pay close attention to the potential impact of PWM on business costs,” Zaqy said.

The government is starting the expansion of the PWM in sectors with the highest proportions of low wage workers in the workforce, and identifying ways to expand beyond these sectors, he added.

The wages of Singapore low-wage workers have not stagnated in the past decade, according to Zaqy. The bottom 20 per cent of wages had increased by 39 per cent while the bottom 10 per cent had risen by 37 per cent in real terms between 2009 and 2019, Zaqy said.

“It remains our aspiration to cover all sectors with progressive wages in the longer term, on top of Workfare, as the fundamental layer of support for all our low wage workers,” he added.

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