The Progressive Wage Model Looks Horrible On Paper (Literally)


I am extremely impressed at NTUC Secretary-General’s aversion to Powerpoint. I would have switched off at probably the second slide or so if he had used it.

Instead (you can see an example of his freehand presentation in this video at 0:53s) there was a refreshingly engaging encounter as Mr Lim Swee Say spent over two hours explaining the role of the NTUC, how he got to become Secretary-General, and what his aims were in trying to improve the labour market situation as well as ameliorate the social costs of economic growth.

Unless you’re an economist, or labour market policy maker, you’re likely to still find the session as interesting as watching the glowing logo on top of the NTUC Centre building change colour. Or less.

I was still curious to know why there was an aversion to a mandatory national minimum wage, or even different minimum wages for different industries. Some supporters of minimum wage already claim that Singapore isn’t doing enough to lift the lowest wages off the floor, like what Hong Kong (HKD 3,580 per month for foreign domestic workers) and Malaysia (USD 281.60 per month for the private sector) are doing.

There is no such thing as the perfect market, and Mr Upturn The Downturn gave a refresher course on labour economics for those turned off because a junior college economics lecturer insisted on referring to something called “Kee-Nee-Sian” economics. (It was only in my first semester of university, after having been made the laughing stock of my first year econs class that I started pronouncing it as students of John Maynard Keynes intended.)

Two permanent ink marker pens and six sheets later, I was aware of a thing called the Progressive Wage Model, as opposed to a silver bullet or “shock therapy” Minimum Wage Model proposed by some.

Instead of merely boosting pay, the labour movement has been, since June last year, aiming to improve the lowest earning workers’ “productivity, skills and career prospects” by means of highly subsidised skills training. The NTUC has also been apparently instrumental in getting government ministries and agencies – themselves very large employers, to only engage companies who let their staff participate in skills training – a move which will earn them accreditation necessary to win government contracts.

The NTUC also has to work in concert with Government to ensure that jobs are created, and that these jobs are filled without employers resorting to and relying on cheap, imported labour at the expense of productivity.

It is a tough balance to strike, and whether the Progressive Wage Model is a better model than a one-stop Minimum Wage as Lim Swee Say says it is may be a bit too early to tell.

I will have you all know that it hasn’t got much to do with Cheaperer, Betterer, Fasterer. The Secretary-General did attempt to explain his much maligned motto in context, but that’s for another story.

Facebook Comments Box


9 responses to “The Progressive Wage Model Looks Horrible On Paper (Literally)”

  1. […] last month to a social media/bloggers’ din­ner (catered by Smil­ing Orchid, no less) and brief­ing at NTUC Cen­tre on One Marina Boule­vard and learned about the (sil­ver, sup­pos­edly) […]

  2. […] that will pay them more than a manda­tory min­i­mum wage, like the pro­gres­sive wage model I wrote about ear­lier will come into being next year. Here’s hop­ing it works […]

  3. […] unions push­ing for bet­ter wages through Pro­gres­sive Wage Model and the gov­ern­ment hand­ing out sub­si­dies, the slack seems to be appear­ing in the third […]

  4. […] points from his blog post: 1. There is no such thing as the perfect market. 2. Progressive wage model doesn't just boost […]

Leave a Reply

Your email address will not be published. Required fields are marked *