Low income workers in Singapore reportedly found their wages stagnate at S$1,000 for 4 years after the Progressive Wage Model (PWM) was implemented in 2012. Singapore employers are not increasing low income wages because winning government tender contract bids are using entry-level wages. The Singapore government awards tender contracts only to the cheapest bidder, hence leaving little or no budget left for salary increments.
In 2015, only 18% of the employers followed the government’s call to increase wages by at least S$60. Most employers complain that the Singapore government is not increasing tender pricing and blame the government for depressing wages.
Landscape firm Esmond director, John Tan, complained in a media interview:
“If you look at the tender price from 10 years ago, it hasn’t gone up. We keep paying our workers higher and higher, yet you never change.”
Another boss of a cleaning firm, LS 2 Services, Dennis Tan said that he lost many contracts because he followed the government’s Progressive Wage Model:
“I don’t know how they arrive at the price while still under the PWM. Maybe they lose money, or miscalculate.”
The current recommended wages under the PWM for cleaners is S$1,000 and this is applicable only to Singapore residents. Singapore employers would typically maximize their foreign worker quota as these foreigners, usually hailed from third world countries, are paid from as low as S$700 a month.
Due to the low wage climate in Singapore, employers are finding it hard to find manpower for the industry and many have appealed to the government to relax foreign worker quota as their businesses could not survive without using cheap wages.
The Singapore government refuse to set a Minimum Wage, criticising the policy as “populist” and “ineffective”. A Minimum Wage will require a seasonal increment, usually yearly, and it is usually set considering basic living costs. The Progressive Wage Model adopted by the ruling party government is however arbitrary, and usually used as an election campaign carrot to fool low income workers. More importantly, the PWM is not mandated by law and it is not an offence to underpay workers in Singapore.