SINGAPORE (Nov 2): Singapore does not have a minimum wage policy for fear of causing businesses to go bust and raising unemployment rates. But companies should be able to afford competitive wages anyway.

The issue of a minimum wage, and the related one of income inequality, have been hot-button topics, as Singapore wrestles with rising discontent about the gap between the haves and have-nots. The concern over worsening inequality has led to calls to implement the policy to alleviate disadvantaged workers.

Instead of implementing minimum wage, the Progressive Wage Model has been developed in Singapore for low-wage workers in the cleaning, security and landscape sectors, where it provides a different wage floor for each industry. It also specifies how much a worker will be paid if they upgrade their skills. This scheme is set to be implemented in other sectors, starting with lift technicians this year.

Advocates of this model hold it up as a more sustainable alternative to the minimum wage.

However, studies on the implementation of minimum wage policy has shown mixed results on employment and workers’ income.

Find out more in this week’s issue of The Edge Singapore (Issue 855, week of Nov 5), on sale now at newsstands.

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