Opening Remarks by Deputy Prime Minister and Minister for Finance Lawrence Wong at The Alliance for Action for Lower Wage Workers 3rd Workshop on 24 September 2022, SMU Administration Building24 Sep 2022
Good afternoon. It is very good to join you for this Alliance for Action (AfA) on lower-wage workers. Advancing the well-being of lower-wage workers is something I am sure that you all feel very passionate about. That is why all of you have decided to spend time in this AfA, to commit not just your ideas and suggestions but even your time and your energies into doing something that advance the well-being of workers.
This is an important priority for the Government, and that is why we are putting in a lot more resources to uplift our lower-wage workers. I am sure many of you would have heard about the announcement in the Budget this year regarding the investments that will take place to help employers introduce progressive wages for their lower-wage workers. The Government is co-funding quite a bit of the wage increases, in order to ease the transition.
We are also spending more on Workfare, in order to uplift the wages of lower-wage workers. With progressive wages and Workfare combined together, we want to see lower-wage workers in Singapore have higher starting salaries. But we also want to see them have continued career progression throughout their working lives. This means not just good starting salaries, but having the new wage increases tied to a skills ladder. To do this, we support their continuous training too, and as they get better skills and they grow in their job responsibilities, they will have better career.
Ultimately, what we want to achieve is a compression of wages in our workplace, not increasing wage gaps but wage compression taking place largely by uplifting of lower-wage workers in Singapore. That is what we hope to achieve.
I think all of you share the same objectives, we share the same concerns. I hope we can work together see how we can do more on this front. Pursuing this objective may sound straightforward. It is the objective that we all share. Sometimes people say, well if that is what you want to achieve, just raise the salaries and job is done; put in place minimum salaries and everything is over, mission accomplished.
If only it was so easy. After all, if you look around the world some of the countries with the highest minimum wages have high wage disparity and high unemployment rates. So there is no silver bullet in solving this problem. We always have to be careful as we work through solutions. We have to be careful about unintended consequences. For example, one can push up the minimum wage, very easy to do as a policy. At the stroke of a pen, you can decide that this is the new minimum wage. But what are the consequences of that? Will companies end up hiring less workers? Will you have more unemployment? Or perhaps, in some cases, what other countries have seen is that a number of the beneficiaries of a higher minimum wage are not low-income families but young people from rich families who go out and work at minimum wage levels. So these are all unintended consequences that can easily happen if you're not careful in thinking about the right solutions.
So while we all share the common objectives and would like to see the well-being of lower-wage workers in Singapore improve, we do have to think through and work together with different stakeholders on what are the best solutions to take this forward.
A key attribute of the Singapore context is that we do not just do things from a top-down solution, but we work together in partnership in a tripartite manner – the Government with employers, together with our union leaders and workers. Together we discuss, we understand each other’s positions, we examine trade-offs and then we try our best to move forward in partnership together. It takes longer for such an approach to work. It is because you have to build consensus and you have to bring people along with you, so it takes longer. But I think it is an approach that leads to more enduring solutions - solutions that work, not because of political headlines, but solutions that make an impact on the ground. That is what we are after, and I am sure that is what all of you are here for, not just for show but because you want to see impact on the ground. That is why we welcome your participation, and we look forward to your ideas and feedback. You are not just a group that looks at giving ideas, you are what we call an Alliance for Action. We hope we can tap on you not just for feedback and suggestions but also for actual solutions that you might want to introduce and which you may want to champion in your own organisation, in your own communities, in the networks that you have.
Addressing wage gaps is just part of the issue for lower-wage workers. As I mentioned just now, we have some ideas around progressive wages and Workfare, but it is one aspect of it. Wages are very important, but there are many other areas that we can think about in terms of the well-being of lower-wage workers – for example, opportunities for them at the workplace, skills training, skills upgrading, rest areas for lower-wage workers, workplace conditions. There are so many different aspects and it will vary from industry to industry too. In many of these instances, we will need the buy-in from employers. It is very important. They play a critical role and we need to get employers to change their mindsets as well, from understanding the importance of the contribution of every worker to looking at wage dispersion within the organisation, but importantly, just valuing the contributions of every worker within the organisation.
That is a very important role that employers within the organisation can play. Because no matter what, within any organization, there will be a gradation of salary. You will never find an organisation that has a flat salary structure across the board. There will always be a range, but how can we keep the range compact and importantly, how can we make sure that every worker is valued? It is one thing to narrow the wage gap, but how do you narrow the status gap? That is a very hard thing to do.
It has to do with mindsets. How do you get people to recognise and appreciate the contributions, the dignity and the value of every worker regardless of their salaries? That is an important mindset change that we want to bring about, but it is not easy. That is why we are appreciative of all your efforts here today. We look forward to your ideas and suggestions on what more we can do as well.
Now, we have this exercise that we have started called Forward Singapore. It is a conversation that we are having across different groups. Even while the AfA - all of you - embarks on projects to uplift lower-wage workers, if you have new ideas and new suggestions for us on what more we can do on the policy front, please give us your feedback so that we can think about what further changes we can make together. As the Government, employers, union leaders and workers - all of us - working together, we must see what more we can do to truly advance the well-being of lower-wage workers in Singapore and become a more cohesive and inclusive society. On that note, once again, I welcome your participation, your feedback and suggestions, and I look forward to having this conversation with all of you. Thank you very much.