Singapore's Ministry of Manpower announced earlier this week that it is looking into a progressive wage model for the retail sector, with the objective of increasing salaries by pushing skills upgrading and productivity increases. The progressive wage model was initially introduced in 2015 for low-paying sectors, beginning with the cleaning, security, and landscape sectors, which are notorious for cheap outsourcing that has depressed pay.
According to Senior Minister of State for Manpower Zaqy Mohamad, if the progressive wage model is expanded to retail, it would cover front-line jobs such as cashiers and sales assistants. However, the diversity of the sector means that progressive wages might not be applicable across all businesses, and the narrow margins of many retailers mean that any wage increases might be passed on directly to consumers. The ministry estimates that the progressive wage model would raise retailers' operating costs by about 5 percent.
The retail trade industry in Singapore employs approximately 150,000 people. Out of this number, figures from the ministry indicate that approximately 45 percent of full-time retail employees in Singapore earn at or less than the 20th wage percentile. While it is not the lowest-paid sector, retail employers typically face difficulty in hiring and retaining staff.
The move to extend the progressive wage model to retail follows the formation, last year, of a tripartite workgroup advocating to increase the pay of low-wage workers. The minister had also said earlier this month that the model could be extended to food services as well, another sector with low wages and persistent difficulty in hiring.