Feb 19, 2014

    Wage model: A case for more transparency?

    SLOWLY, but surely, cleaners who have suffered through low wages are getting higher pay.

    This was after Parliament passed a Bill on Monday that will ensure only cleaning companies that adopt a system of paying wages that increase progressively with higher skills and training will be given a government licence to operate.

    The Government is putting a lot behind the progressive wage model, as it is called, and, on Monday, Minister for the Environment and Water Resources Vivian Balakrishnan urged sceptics to put their "faith" in it.

    That the model is effective is especially important as the Government sees it as a better alternative to a national minimum wage model to raise wages of low-wage workers in tandem with productivity.

    And as unionist Patrick Tay (Nee Soon GRC) noted, the labour movement plans to extend the model to other sectors soon, first to landscaping and security services, and then eventually to even white-collar jobs.

    But crucially, if the wage model is to be extended further to more sectors, the public will need to be convinced that the wage levels set are the right ones.

    That is why while the decision was roundly praised, several Members of Parliament still had reservations over how the wages were set and sought more clarity.

    The MPs hoping to know why the base wage for cleaners was set at $1,000 and not higher, or how wages will be determined for other sectors, were left disappointed.

    They were told no more than that it was negotiated behind closed doors by a committee made up of employers, unionists and government officials - the Tripartite Cluster for Cleaners.

    In his response to their questions, Dr Balakrishnan took pains to explain why the tripartite discussions were essential, and should be kept private.

    "This is tripartism that works," he said. "It has worked so far and without us having to be overly intrusive, without asking them to be overly officious and everybody just takes an official position, digs trenches and becomes defensive about it."

    He also explained that this process means that the model is therefore not a minimum wage "by political decree", and the wage should never be determined by Parliament or by civil servants.

    Under the model, cleaners in office buildings and hawker centres will start at a wage no lower than $1,000 a month, while cleaners hired by town councils and doing public cleaning will earn not less than $1,200.

    While the wages for other sectors have not yet been set, Dr Balakrishnan said the thinking behind the mandatory licensing and progressive wage model is to give workers a "fair wage".

    But without explaining how the wage levels were decided, it leaves the understanding of what is fair decidedly vague.

    Hence, Ms Irene Ng (Tampines GRC) wanted to know if the salaries of the cleaners could be set "with reference to objective criteria such as the minimum living level and inflation rate, with automatic annual increases linked to changes in the costs of living".

    Workers' Party Non-Constituency MP Gerald Giam asked twice for the committee behind the decision to make public its reasons for setting the wage levels.

    Dr Balakrishnan's explanation that the guidance from the Government to the committee was "whatever you do, do not kill this sector, do not destroy jobs, do not deny job prospects for the people who need it most", gives some insight into the serious considerations and deliberations that must have taken place.

    The next useful step would be to explain how these considerations then led to the salary levels set.

    While the progressive wage model is a novel way to institute a wage increase in the sectors that have long suffered from cheap sourcing and low wages, as the breadth of its reach grows, the questions being asked about it will also grow.

    Starting with a clear understanding of how the wage is set will go some way to achieving the model's goal not just of raising wages but also of convincing the public that it is the best move for Singapore in the long term, and one that will put perennial calls for a national minimum wage to rest.

    Dr Balakrishnan said: "I would urge this House, have faith, let's see how this works. I'm sure we will make adjustments over time and we will make the necessary adjustments."

    Might that faith be increased with more transparency over the wage? In this case, an "intrusion" on tripartism may be worthwhile.