Tuesday, September 28, 2021
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Local Qualifying Salary will not be further raised ‘for now’, wage increases to be sustainable: Zaqy Mohamad

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PEGGING WAGES TO COSTS

MP Gerald Giam (WP – Aljunied) asked in a supplementary question if it would be better to peg the base wage for local workers to the average household expenditure on basic needs, which is also S$1,400.

“This will allow the minimum wage to rise in tandem with cost increases so that the low wage workers will not lose out over time,” he said.

Mr Zaqy replied that the ministry takes guidance for progressive wages from the National Wages Council because they should be sustainable and “not open to political auction”. The council does look at data projections, including inflation and its impact on the cost of living, he said.

“These are quite complex matters in which we need to give assurance not just to the workers but to the employers and the consumers at large to create a fair system,” he said.

To NCMP Hazel Poa’s (PSP) question on whether the LQS requirement will “spell the end of part-time employment”, Mr Zaqy clarified that there is also a rate for part-timers of S$9 an hour and this provides “some flexibility” for part-time workers.

MP Jessica Tan (PAP – East Coast) asked how the Government can ensure that the LQS of S$1,400 does not become the maximum wage for local workers in firms that hire foreign workers.

Mr Zaqy said that PWM will be the main driver of wage growth in the years ahead and it has shown good results in the sectors that it has been implemented such as cleaning and landscape sectors.

Wage benchmarks in occupational PWMs will also help to push up wages further and this will “drive market forces” to raise wages.

To a clarification from MP Edward Chia (PAP – Holland-Bukit Timah) on the link between productivity and upskilling of workers, Mr Zaqy said that the “narrative” on productivity gains has shifted.

“The approach so far with PWM has been that the worker has to upskill to improve productivity. And therefore you justify productivity gains against wage gains,” he said. “But I think moving forward, we also have to think about productivity gains very differently.”

Using the example of the security industry, he said that there is a limit to how much each worker’s productivity can be improved through training, while many firms have now improved productivity by using technology.

“So there is the worker-level productivity as you train and upskill him, but there is also that level of productivity that you can get when firms make the effort to transform, do job redesigns,” he said.

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