Progressive Wage Model Singapore 2022 Update: Retail Workers to Get a Pay Raise From 1 Sep 2022
Joel Koh●
Undoubtedly, working in retail is tough.
Retail workers in Singapore and around the world face issues like having to work long hours on their feet, dealing with unreasonable customers, low income, sparse benefits and limited career progression.
But, things are about to improve slightly for retail workers.
Yesterday (15 Aug 2022), the Ministry of Manpower (MOM) announced that they have accepted the Tripartite Cluster for Retail (TCR)’s recommendations on their new Progressive Wage Model (PWM) for the retail sector.
MOM stated that ‘the TCR has recommended a three-year schedule of sustained PWM wage increases from 2022 to 2024, which will take effect from 1 September 2022. This includes additional PWM wage requirements for overtime hours worked in a month.
The ministry added that the ‘TCR’s recommendations will benefit about 46,000 resident full-time and part-time retail assistants, cashiers and supervisors, with those at the entry-level seeing their monthly wages move up by 18 per cent over the three-year period.’
Here’s all you need to know!
TL;DR: Progressive Wage Model (PWM) Expansion For Retail Workers: Helping Low Wage Workers in Singapore
| PWM Job Level | Baseline Gross Wages | From 1 Sep 2022 | From 1 Sep 2023 | From 1 Sep 2024 | Total Growth Rate [Compounded Annual Growth Rate (CAGR)]* |
|---|---|---|---|---|---|
| Retail Assistant/Cashier | Monthly Salary (Excluding Overtime) | $1,850 | $1,975 (+$125) | $2,175 (+$200) | 18% [+8.4%] |
| Hourly Salary (44 Hour Week) | ~$9.70 | ~$10.36 (+$0.66) | ~$11.41 (+$1.05) |
||
| Senior Cashier/Senior Retail Assistant | Monthly Salary (Excluding Overtime) | $2,035 | $2,175 (+$140) | $2,395 (+$220) | 18% [+8.5%] |
| Hourly Salary (44 Hour Week) | ~$10.67 | ~$11.41 (+$0.74) | ~$12.56 (+$1.15) |
||
| Assistant Retail Supervisor | Monthly Salary (Excluding Overtime) | $2,240 | $2,395 (+$155) | $2,635 (+$240) | 18% [+8.5%] |
| Hourly Salary (44 Hour Week) | ~$11.75 | ~$12.56 (+$0.81) | ~$13.82 (+$1.26) |
*CAGR from 2022 – 2024. According to Investopedia, ‘the CAGR is the rate of return (RoR) that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each period of the investment’s life span.’ In this context, the yearly increase in salary is based on the previous year’s increase, and thus the increases in salary are compounded.
Click to Teleport
- What Is a Progressive Work Model (PWM)?
- Expansion of PWM to Cover Retail, Food Services and Waste Management Sectors
- PWM vs Minimum Wage in Singapore
What Is a Progressive Work Model (PWM)?
But first, some context.
The Progressive Wage Model (PWM) is a wage structure initiative developed by a tripartite workgroup consisting of the Government, employers and unions to help increase lower-wage workers’ wages through skills upgrading and productivity improvements.
An important thing to note is that the implementation of the PWM is not enforced by legislation but through business licensing instead.
When Was the Progressive Wage Model Introduced?
In case you were wondering, Singapore’s sole workers’ union, the National Trades Union Congress (NTUC), introduced the PWM back in June 2012.
The model comprises four ladders:
- Skills
- Productivity improvement;
- Career paths
- Wages.
What Is the Purpose of the Progressive Wage Model?
But what of the PWM’s purpose?
If I were to distil it down, the model aims to help workers achieve sustainable wage increases through the acquisition of better skills and higher productivity.
There’s an emphasis on sustainability as we won’t want a situation where the workers’ salaries increase, but the business fails or passes the costs of paying more wages directly to the consumer. We might even run the risk of an increase in unemployment.
Ideally, the increase in productivity will result in more profits for employers.
In addition, those goods and services buyers will get to enjoy higher quality and service standards.
Who Does the Progressive Wage Model Cover
Currently, the PWM covers Singapore citizens and Singapore permanent residents (PRs) working in the cleaning, security, and landscape sectors:
| Sector | PWM Requirements Took Effect From: |
|---|---|
| Cleaning sector | 1 September 2014 Note: Wages increased further from 1 July 2017. |
| Security sector | 1 September 2016 Note: Wages increased further from 1 January 2019. |
| Landscape sector | 30 June 2016 Note: Wages increased further from 1 July 2020. |
In addition, MOM is encouraging employers to apply the ‘principles of progressive wages’ for foreign cleaners, security officers and landscape maintenance employees as well.
That’s not all.
Expansion of PWM to Cover Retail, Food Services and Waste Management Sectors
From 1 September 2022, the MOM announced that the PWM approach and coverage will be expanded as follows:
| Key recommendations | -Expand Sectoral Progressive Wages (PWs) to retail, food services and waste management
-Extend existing cleaning, security and landscape Sectoral PWs to in-house local workers -Introduce Occupational PWs for administrators and drivers -Introduce a new requirement where firms employing foreign workers have to pay at least the relevant Sectoral or Occupational PWs to local workers in applicable job roles and at least the Local Qualifying Salary (LQS) to all other local workers. |
|---|---|
| When they will be implemented | Existing sectoral PWs (cleaning, security, landscape):
-Licensing/registration requirements will continue to apply Sectoral PWs in new sectors: -Retail from 1 September 2022 -Food services from 1 March 2023 -Waste management from 1 July 2023 Extension of existing cleaning, security and landscape Sectoral PWs to local in-house workers (currently, these Sectoral PWs are only applicable to local workers in licensed or registered firms): -From 1 September 2022 Occupational PWs for administrators and drivers: -From 1 March 2023 New LQS requirement (for all other local workers not covered by PWs) -From 1 September 2022 |
More specifically, the MOM has accepted the TCR’s recommendations for the retail sector.
These recommendations, which take effect from 1 September 2022 will benefit about 46,000 resident full-time and part-time retail assistants, cashiers and supervisors, and 14,000 workers will receive wage increases to the first year PWM level as follows:
| PWM Job Level | Baseline Gross Wages | From 1 Sep 2022 | From 1 Sep 2023 | From 1 Sep 2024 | Total Growth Rate [Compounded Annual Growth Rate (CAGR)]* |
|---|---|---|---|---|---|
| Retail Assistant/Cashier | Monthly Salary (Excluding Overtime) | $1,850 | $1,975 (+$125) | $2,175 (+$200) | 18% [+8.4%] |
| Hourly Salary (44 Hour Week) | ~$9.70 | ~$10.36 (+$0.66) | ~$11.41 (+$1.05) |
||
| Senior Cashier/Senior Retail Assistant | Monthly Salary (Excluding Overtime) | $2,035 | $2,175 (+$140) | $2,395 (+$220) | 18% [+8.5%] |
| Hourly Salary (44 Hour Week) | ~$10.67 | ~$11.41 (+$0.74) | ~$12.56 (+$1.15) |
||
| Assistant Retail Supervisor | Monthly Salary (Excluding Overtime) | $2,240 | $2,395 (+$155) | $2,635 (+$240) | 18% [+8.5%] |
| Hourly Salary (44 Hour Week) | ~$11.75 | ~$12.56 (+$0.81) | ~$13.82 (+$1.26) |
Progressive Wages vs Minimum Wage in Singapore
On a more related note, you might want to read our coverage of the Progressive Wage Model and Minimum Wage debate.
This article brings to the fore the debate surrounding minimum wage: should it be enforced, and why?
