Impact of Progressive Wage Model on Wages in Cleaning Industry

Mr Christopher de Souza asked the Minister for Manpower (a) whether he can provide an update on how the Progressive Wage Model and best sourcing have lifted the wages in the cleaning industry; and (b) whether any changes in attitude towards professional cleaners have been observed.

Mr de Souza would recall that the payment of basic wages according to the tripartite-negotiated Progressive Wage Model (PWM) was included as a licensing condition for cleaning businesses this year. Under the Environmental Public Health Amendment Bill that just came into force in April 2014, all cleaning companies have until September this year to be licensed. Resident cleaners deployed under new cleaning contracts entered into from 1 April 2014 will have to be paid according to PWM wage levels from 1 September 2014. By 1 September next year, all resident cleaners must be paid according to the PWM.

Given this timeline, it will take a while before we can observe the full impact of the mandatory PWM on our resident cleaners' wages, but we are starting to see improvements. Since the PWM recommendations were released by the Tripartite Cluster for Cleaners in October 2012, cleaners' median basic wages have risen by 16% from $820 in June 2012 to $950 in June 2013, compared to a 5% increase in the previous year.

Going forward, we can expect the professional standards of the cleaning industry to improve as a whole. Service providers will have to meet minimum training requirements for their cleaning workforce under the licensing regime. At the employee level, cleaners would also be encouraged to up-skill and progress along the PWM wage-skill ladder. Service buyers will also be driven towards quality-based instead of headcount-based procurement practices, as the mandatory PWM will help address the prevalent cheap-sourcing that had previously depressed wages and compromised employment conditions in the sector.

We will closely monitor the impact of the PWM on cleaners' wages and outsourcing practices, and continue to work with our Tripartite Partners to promote wider adoption of best sourcing. The Tripartite Cluster for Cleaners will also regularly review the PWM to ensure its continued relevance.

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