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Written Response by Mrs Josephine Teo, Minister for Manpower, to Parliamentary Question on studies on effect of PWM on employment outcomes

Employment practices

NOTICE PAPER NO. 1490 OF 2019 FOR THE SITTING ON 14 JANUARY
QUESTION NO. 1113 FOR WRITTEN ANSWER

MP: Leon Perera

To ask the Minister for Manpower whether there are reviews or studies available to evaluate the impact of the Progressive Wage Model (PWM) on the number of persons employed in the cleaning, security and landscape sectors and, if so, what do the studies suggest has been the impact on employment numbers of the PWM thus far.

Answer

  1. The Progressive Wage Model (PWM) was implemented in the Cleaning, Security and Landscape sectors as a targeted intervention to address low and stagnant wages caused by market failure of cheap sourcing. It aims to raise the salaries of local workers in these sectors by providing a clear progression ladder for workers to earn higher and sustainable wages as they become more skilled, more productive and take on higher job responsibilities.
  2. The number of local workers employed in these three sectors depends on many factors beyond PWM itself, such as the state of the economy, adoption of labour saving technologies, improvements to company’s business processes, and changes in foreign worker (FW) policies. It is difficult to attribute changes to local employment numbers to the PWM alone.
  3. What is clear, however, is that since the PWM was implemented, workers in these three sectors have seen positive real wage growth. Between 2011 and 2016, the real median gross wages of full-time resident cleaners, security guards and landscape maintenance employees increased by 32%, 36% and 16% respectively. This was achieved while keeping local unemployment rate low at around 3% and maintaining employment rate at a healthy level of around 80%.