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[h=2]Grace Fu: Workers’ salaries to increase in tandem with productivity gains[/h]
October 28th, 2012 |
Author: Editorial
If higher wages for cleaners were attained through productivity growth, why would the hawkers who are the customers be needing to pay higher fees?
In a 20-minute keynote address at the Economic Society’s annual forum last Thu (25 Oct), Minister in PMO Grace Fu said Singapore is aiming for quality growth driven by productivity and innovation, not labour – and this will ensure sustainable wage growth.
She stressed that increasing productivity will ensure sustainable wage growth for Singaporeans. She then referred to the progressive wage model as an example of an inclusive growth strategy. She cited the cleaning industry as an example.
She noted that the progressive wage model for the cleaning industry spells out clear progression of wages with skills upgrading and training, allowing pay increase to move in tandem with productivity gains.
Ms Fu said, “The key point to note about this plan is that it is a targeted one, taking the needs of the cleaning industry (and) taking the needs of all the stakeholders, the employers, the employees and the companies into consideration. We believe this is a more effective and sustainable way of helping a targeted segment of our workers.”
In other words, what Ms Fu is saying is that cleaners can get higher wages as their productivity improves. So, for example, without the need to increase prices to customers, cleaning companies can in theory double the salaries of cleaning workers if half of the workers can still do the same amount of work as before through productivity gained.
So, say, previously, 4 cleaning workers, 2 locals and 2 foreigners with each earning $1,000 per month, were needed to clean a hawker centre everyday. Through mechanization and improvement in the cleaning process, only 2 cleaning workers, say, are needed now to clean the hawker centre everyday, but still able to achieve the same level of cleanliness.
Then in theory, the cleaning company can let go of the 2 foreign workers and retain the 2 locals, even paying them a salary of $2,000 per month now. The cleaning company still makes the same amount of profit as before, the customer is happy that cleanliness is not compromised and the workers are ecstatic with their salaries doubled. Everyone is happy. That, of course, is in theory.
But what is the actual situation on the ground?
Recently, National Environment Agency (NEA) announced that cleaning fees at 9 hawker centres will have to be increased, upsetting many hawkers at these centres (‘Hawkers upset at cleaning fee hikes by NEA‘).
The fee increase ranges from 79% to 156% in the 9 hawker centres. For example, at Holland Village Market and Food Centre, hawkers will now have to pay the new fee of $614 a month, up from $240. The 9 affected hawker centres all come under a single contract with cleaning contractor, Clean Solutions.
Replying to media enquiry, NEA said that the new rates are mainly due to higher wages for cleaners and training costs by cleaning contractors.
If higher wages for cleaners were attained through productivity growth, why would the hawkers who are the customers be needing to pay higher fees? And why would the hawkers be even paying for the training costs by the cleaning companies?
Something just doesn’t sound right. What do you think, Ms Fu?
.
Join our TRE facebook page here: http://www.facebook.com/TREmeritus
If higher wages for cleaners were attained through productivity growth, why would the hawkers who are the customers be needing to pay higher fees?
She stressed that increasing productivity will ensure sustainable wage growth for Singaporeans. She then referred to the progressive wage model as an example of an inclusive growth strategy. She cited the cleaning industry as an example.
She noted that the progressive wage model for the cleaning industry spells out clear progression of wages with skills upgrading and training, allowing pay increase to move in tandem with productivity gains.
Ms Fu said, “The key point to note about this plan is that it is a targeted one, taking the needs of the cleaning industry (and) taking the needs of all the stakeholders, the employers, the employees and the companies into consideration. We believe this is a more effective and sustainable way of helping a targeted segment of our workers.”
In other words, what Ms Fu is saying is that cleaners can get higher wages as their productivity improves. So, for example, without the need to increase prices to customers, cleaning companies can in theory double the salaries of cleaning workers if half of the workers can still do the same amount of work as before through productivity gained.
So, say, previously, 4 cleaning workers, 2 locals and 2 foreigners with each earning $1,000 per month, were needed to clean a hawker centre everyday. Through mechanization and improvement in the cleaning process, only 2 cleaning workers, say, are needed now to clean the hawker centre everyday, but still able to achieve the same level of cleanliness.
Then in theory, the cleaning company can let go of the 2 foreign workers and retain the 2 locals, even paying them a salary of $2,000 per month now. The cleaning company still makes the same amount of profit as before, the customer is happy that cleanliness is not compromised and the workers are ecstatic with their salaries doubled. Everyone is happy. That, of course, is in theory.
But what is the actual situation on the ground?
Recently, National Environment Agency (NEA) announced that cleaning fees at 9 hawker centres will have to be increased, upsetting many hawkers at these centres (‘Hawkers upset at cleaning fee hikes by NEA‘).
The fee increase ranges from 79% to 156% in the 9 hawker centres. For example, at Holland Village Market and Food Centre, hawkers will now have to pay the new fee of $614 a month, up from $240. The 9 affected hawker centres all come under a single contract with cleaning contractor, Clean Solutions.
Replying to media enquiry, NEA said that the new rates are mainly due to higher wages for cleaners and training costs by cleaning contractors.
If higher wages for cleaners were attained through productivity growth, why would the hawkers who are the customers be needing to pay higher fees? And why would the hawkers be even paying for the training costs by the cleaning companies?
Something just doesn’t sound right. What do you think, Ms Fu?
.
Join our TRE facebook page here: http://www.facebook.com/TREmeritus
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