Chatting with Lim Swee Say Part 2

In Money, Politics on August 31, 2014 at 12:52 am

Tomorrow, a big change is going to sweep over one sector, or rather, cause a ripple in the way employers pay their workers. It has to do with the 40,000 or so cleaners in Singapore’s 900 companies. From then on, they will have a career progression path, much like most other workers. It means that they won’t be stuck at the $1,000-or-so a month bottom rung of the pay ladder. If they learn to operate machines, they can move up a step or two, and this will be accompanied by a raise in pay. No big deal you say? After all, it is the case in other parts of the labour market. You do more, you earn more. Except that the cleaning sector is an odd place.

And that’s because of people like you and me…   

Mr Lim Swee Say, head of the labour movement, was in story-telling mode. The story had to do with how when he was Minister for Environment and Water Resources in 2003, he visited a hawker centre and watched how cleaners went about their work. A pail of water and a cloth, which became dirtier and dirtier with every table cleaned. He got to talking to the hawkers who said they each paid each cleaner $80 a month to clean the tables.  That was all the cleaners could do in a day. Would they pay them $120 ? They said they would, provided that the cleaners could do their work better and not have customers complain about the state of uncleaned and uncleared tables. That was when he worked with the contractors to see if the cleaners could do a better job as well as handle more stalls. The cleaning trolley, which  people now see in hawker centres, with different compartments for detergents and several “washing’’ containers, is one outcome. It allowed the cleaners to do their rounds a lot quicker. They could handle 12 stalls instead of eight. And it was a lot cleaner too. Their pay, therefore, went up. (He calls it ESS – easier, safer, smarter)

This a reason for Mr Lim’s obsession with labour-saving devic es. Pay can only go up if low wage workers can work faster and better (a Lim Swee Say phrase..). That means using machines. But there is another unique thing about cleaners: They do not work directly for their employers. They really work for third parties: the mall owners, building managements and hawker centre committees who are old fashioned about the way they tender out jobs for cleaners. They usually set a head-count, rather than define the job scope. That means they ask for a certain number of cleaners, which meant that it is in the interest of the contracting company to pay the cleaners as a low a wage as possible to win the tender. Mr Lim calls this “cheap sourcing’’. They should be leaving it to the companies to decide the number of cleaners needed for the job to be done, he said, or “best sourcing’’. (So he has a BSI – Best Sourcing Initiative…)

I thought that made sense. I see it for myself in my condominium when the queries are about the number of security guards rather than whether the job gets done. Because, really, why should we care how many people the cleaning or security company hires so long as the place is clean and security is assured?

But changing mindsets from cheap sourcing to best sourcing is a slow and arduous process. When a company loses a contract the next time bidding comes around or when the contract expires, it does not mean the cleaners or security guards lose their jobs. What happens then is that the new company hires them instead, and since the new company probably got the tender because it under-cut the rest, their pay does not go up. In fact, it might go down, if they prefer to stay in familiar surroundings. Hence, you sometimes see the same people all the time – in different uniforms. This is a spiral which goes on and on, leaving wages stagnant.

To raise their wages, a structural change must take place to “force’’ higher pay in the sector. Enter the progressive wage model which has been described variously as a minimum wage. (He calls this PWM. )

Mr Lim acknowledged that in the cleaning sector, as well as the security and landscaping sector soon, this will be the case. Companies are not allowed to pay cleaners less than $1,000 a month. This is the law and is part of a licencing condition that the National Environment Agency will oversee.  

But more than a floor, a series of rungs have been created, each tied to job scope and productivity. So is an indoor cleaner worth more than an outdoor cleaner? If there were different sets of machines, which ones can workers operate?  A cleaner’s ability will be matched against an industry standard of skill levels. (This, by the word, is WSQ – Work Skill Qualifications). And this is again set to different wage levels. Again, all this is law and a company which flouts this stand to lose its licence – and cannot operate at all.  

I proceeded to irritate Mr Lim with a few “buts’’.

But don’t foreign workers have a role in keeping wages low in the sector? If we kept the numbers small, the wages of local cleaners will go up no?

Mr Lim’s reply: Not with the dependency ratios in place. So if a company hires 10 locals, it can only hire one foreigner if the dependency ratio is set at 10:1. The number of foreigners hired is dependent on the number of locals. If the company can make do with fewer workers, it will lay off the foreigner first – unless of course, companies scream loud enough for dependency ratios to be changed.

But isn’t this intervening in the free market by using the blunt instrument of the law?

Mr Lim’s reply: Yes. And it has to be done because the market has failed to set the wages correctly because of the emphasis on headcount rather than quality of manpower.

But why not set a minimum wage for all labour intensive sectors?

Mr Lim’s reply: This would allow companies to sack people and hire others – at minimum wage. So it doesn’t matter how good you are, you will never be better paid because the headcount only cares about how “cheap’’ you are.

But a worker who is trained may get sacked anyway and what happens if joins a new company?

Mr Lim’s reply: He doesn’t start at the bottom. He takes his qualifications with him which will require that he be paid according to his skill level. (Hmmm….it’s like have a diploma versus a degree) A smart employer will make sure the salary is according to the job scope.

But the cleaning companies would be required to train workers or get new machines and where will they get money for this?

Mr Lim’s reply: Actually, he just rolled off more ABCs….more funds and schemes that will help pay for training. Then there is IGP, Inclusive Growth Programme, that will help pay for new machines. (Go read Part 1 if you want to know more)

But some cleaning companies won’t be able to qualify for the licence and will have to shut down. So where will workers go?

Mr Lim’s reply: Companies have had six months to prepare and it seems that most will be able to meet the Sept 1 deadline. If some have to shut down, others which are licensed will snap up the workers. He doesn’t think people should be too bothered if there is a shake-up because the bottomline is: cleaners’ wages will go up.

I’m glad I had a chance to talk to him. (Our meeting was supposed to be held at TCC at NTUC centre at OMB – yup, his subordinates speak in ABCs too – but was shifted to his office). There are too many complicated policies in Singapore. They are like jigsaw puzzles. Miss a piece and you won’t get the whole picture. The PWM or progressive wage model (may I ask that the NTUC not be so quick to turn everything into acronyms?) looks pretty workable to this layman although I pity the people who have to monitor its workings. I don’t know, though, if there are further ramifications for the labour market, in terms of salary distortions.  

Mr Lim said he’s only looking at the security and landscaping sectors, which suffer the same “market failure’’, for the time being. Slow steps. He went on to say that he hopes other sectors would voluntarily adopt the PWM (I don’t know how he keeps all the ABCs in his head).  

I have to say that I didn’t manage to irritate the genial man.

He answered questions so well, so fully.  

He irritated me instead.

Chatting with Lim Swee Say Part 1

In News Reports on August 29, 2014 at 6:50 am

So we have Mr Lim Swee Say weighing in on productivity today on ST page 1. Do I hear a yawn? We’ve been hearing so much about how low our productivity is and how we should be raising this by turning to manpower-saving devices and training to a high level that I’m not sure anyone can say anything new anymore.

Except, of course, if the G throws in yet another acronym announcing yet another fund for SMEs to take advantage of or for low-wage workers to enjoy. But I’m going to listen a little harder to Mr Lim because the labour movement has in recent time been doing what it should be doing: focusing on its core mission of protecting the workers. And also because I had a long chat with him about the NTUC to clarify some of its workings. (No, I have not been brainwashed and no, he did NOT give me NTUC Fairprice vouchers)

I’ve never been a fan of the NTUC. I recall how last year at a dialogue on fair employment practices, nobody in the room raised the role of the labour movement in ensuring equal employment opportunities for foreigners and locals. It would have been natural, I thought, for workers to say that this should be something to be taken up by the NTUC, instead of being a Government-led process. What does it say about the NTUC’s image with the people?

In recent time, however, the NTUC seems to have been weighing in quite heavily on the issue of wages and the protection of workers’ rights. Like how it wrangled with employers in the National Wages Council to get an absolute quantum increase for low wage workers. Like how it’s been getting more workers unionised. Like how it is pushing for the progressive wage ladder for certain industries. I tell myself that it is acting more like a union these days, and less like a social organisation. I told Mr Lim that too. He, being a nice man, overlooked my condescension.

Mr Lim said the NTUC has a higher unionisation rate than in OECD countries. Over the past year or so, it got 95 firms to agree to let their workers join unions, boosting its membership numbers from 770,000 last year to 830,000. It seems that two were reluctant to do so and the union members went into “organising’’ mode, waylaying workers outside the gate to conduct a secret ballot. How cloak and dagger, I thought! I also thought to myself: Why would any firm object to the rather tame union that Singapore has?

It’s a question I posed to Mr Lim. He said he met a foreign boss of a very, very, very big company who didn’t want a union in-house. He saw no reason for this since he is a good employer who rewards and trains his workers well. There was no need for a union to stick its nose in.

Mr Lim’s answer to the man floored me. He cited three reasons which got the boss to say OK to letting the union in:
a. Recruitment and retrenchment: It was the labour movement which placed his workers, through e2i. And if he ever had to retrench his workers, the union would help place them in other jobs. As a good employer, he must surely be concerned for his worker’s welfare
b. Training. If the company is unionised and meets certain industry standards, the union would help him pay for the training of its workers.
c. Stretching the dollar. His workers might be happy with their salaries but if they are union members, they would be entitled to benefits that will further stretch their dollar.

A rather bad thought crossed my mind: Hmm. No wonder bosses and unions seem to be in cahoots! You don’t cause trouble. Shouldn’t you cause some trouble? Are employers always so nice? And what of the unionised workers themselves, what do they gain?

In this instance, I think the NTUC does itself a disservice by not trumpeting what it does on behalf of workers in terms of its core mission. What is “organising workers’’? How does collective bargaining take place? Do workers know that whatever the union negotiates with bosses only applies to members – unless the bosses extend it out of “goodwill’’. Ditto for retrenchment benefits to be paid out? What, in other words, do union members get that non-unionised members don’t? What is worker protection?

Here, he referred me to the Industrial Arbitration Court. Last month, the Singapore Manual & Mercantile Workers’ Union and China Airlines Limited argued over the salary ranges for bargainable employees in the proposed collective agreement. The union wanted an increase in the maximum of the salary ranges, while the company wanted to raise only the minimum. It’s still pending.

Last year, the Singapore Industrial & Services Employees Union asked the court to order First Defense Services to pay workers an annual salary increment of 5 per cent with effect from 1 Jul 2011, or alternatively a one-off lump sum equal to a month’s salary. The Court decided that the company should pay a built-in increment of $50 on the monthly basic salary of employees earning up to and including $2,000 per month and a built-in increment of 2.5 per cent of the monthly basic salary for employees earning above $2,000 per month.

Other unions have gone along this route although not all were successful. The Singapore Catering Services, Staffs & Workers Trade Union, for example, went to court on behalf of an ex-employee of Hollandse Club over termination of service and reimbursement of medical expenses. The court dismissed the case.

Mr Lim didn’t say so but I think he believes I’ve been pretty myopic about the role of the trade union in Singapore. It isn’t about just representing people who are unionised, but raising the salaries and ensuring the welfare of all workers across the board. That’s why he’s been weighing in on productivity, trying to encourage early adopters to make the move towards labour-saving devices so that others can see the benefits. That’s the only way higher salaries can be sustained, he said, besides mandating wage increases for low-wage workers or getting the G to keep giving Workfare Improvement Supplement for low wage workers in cash and in their CPF.
Before you yawn, here is one interesting project I thought worth highlighting known as the Inclusive Growth Programme. Can bosses of SMEs which employ a lot of manual workers please, ahem, take note.

It works this way:
A company spots some ultra-new labour saving device but can’t afford it. It can go to NTUC which will pay for 80 per cent of the cost of the machine. As for the rest of the bill, it can go get it from the Productivity Improvement Council. In other words, it has obtained the machine for free. But after buying and training workers (this is subsidised too) to use them, it has to commit to raising the pay of the workers by at least 10 per cent. How come? Because the company would need fewer workers with the device. Mr Lim reckoned that the wages of 70,000 workers have been raised this way over the past three years.

The hope is that other companies in the same business would see what’s happening and do the same. And no, it doesn’t mean the union will fund everyone who buys the machine. Hence, this is a reward for early adopters. Seems that a noodle maker got a noodle packing device this way. A couple of hotels also managed to get a pump which lifts beds, a great help for chambermaids.

But what of those who get laid off then? I suppose it will be the foreigners who get laid off first. And possibly, just possibly, locals will be more attracted to the jobs.

Such a slow process, I thought. Well, the faster progression will be for cleaners, some 45,000 in some 900 companies. Starting Sept 1. Mr Lim then told me the story of how he got involved over the issue of cleaners’ pay. It was while he was at a hawker centre.

Tomorrow: Mr Lim and the hawker centre cleaners

Workplace streaming

In News Reports on August 27, 2014 at 11:17 am

I’m glad I’ve never worked in the public service. What if I got placed on – or streamed into – some career track with a very low glass ceiling? What if the track is so rigid that promotions come far and few in between with pay rises that are pre-determined rather than merit-based? What if people less talented got placed on a separate track that reached to the skies because they did well in some examination hall some time ago?

I was aghast at today’s report about the civil service boosting the career paths for non-grads. I never knew much about the dual tracks with posts that depended on whether someone was a graduate or not. All I knew was that entry into the Administrative Service required sterling results which set a path to the top. No third class honours, no siree…The degrees had to be pedigrees. But below the exalted ranks, the hoi polloi can’t seem to get away from being “streamed’’ just as they were in the education system. Is it any wonder than that parents obsess over their children’s grades given the country’s biggest employer has set the example of chasing paper qualifications? So if you have the paper, you are set for a smooth life. Our parents were…right.

Yup, a cultural shift is needed.

The wonder is that the change has come so late. So the Prime Minister has said that the civil service will lead the way in measuring the worth of a person on his character and performance rather than a piece of paper. It seems like he was being kind. The civil service is not leading the way, it is catching up with the private sector. It’s pretty crazy to read that non-graduate teachers who perform well on the job can now be placed on the graduate salary scale. This is like crossing from the Normal stream to Express stream in secondary school. Surely, if a non-grad’s performance is as good as a grad, they should at least make the same amount of money and not be constrained by their pre-determined tracks?

It’s also crazy to read that non-grads who do well can get their first promotion after two to four years, down from the current three to six years. Hmm. I wonder about grads then – how many years do they have to wait? Probably shorter. I also keep wondering if I’m supposed to go “Yay!’’. So, in the past, there’s a set pattern and too bad if you are a super teacher and only hold a diploma, you wait three to six years, okay? The fellow with the degree gets promoted first. Now….got chance to switch to a different ladder. Yay!?

Why are there even two ladders dependent on education qualifications? It seems that there are ONLY three agencies with single-track schemes for grads and non-grads : the People’s Association, the Inland Revenue Authority and the Home team. PM raised an example of PA officer who did good while the media today highlighted police officers. I am almost sure the examples were picked for the media to interview rather than sourced by the media themselves. It would be too funny – or rather not funny – to have a well acknowledged good performer who is a non-grad, who got held back because the civil service HR practices…Maaaan, he or she should have joined the three agencies and not any other ministry or G agency…

But this is not school, where you cross ladders if your grades are good enough. In fact, streaming in school is fairer because it is based on academic performance at that point in time, Surely, in the workplace, performance at the point in time is more important than past school results? And if a person’s performance – based on whatever criteria – is on par with that of a grad, he should get the same rewards as the grad. And if performance outstrips the grad, he gets more. Of course, it all depends on whether the different ladders are drawn up such that comparisons in terms of performance can be made. Or whether each ladder is so different in job scope, that is, designed to keep a good man down – or raise him up. The grad track is known as Management Executive and the non-grad track is Management Support. Since we’re all into changing names to avoid stigmatisation (like no more Third Class Honours), maybe a nicer term than “support’’ can be used. Some measurement must be done comparing the work and worth of line managers, say, principals, and those of individual professionals like super teachers who don’t want supervisory roles. I guess management consultants will now be in demand.

I read ST and TODAY to find out if these separate career paths would merge into one. Yes, the PSD is studying ways to merge the graduate and non-graduate schemes into one career path. Yay! (Not sarcastic this time) I wish a time-frame was given. In fact, I think that this was the most significant point of the story, not the itsy-bitsy details about teachers getting promoted in how many years instead of how many years. There are 139,000 officers in the public service, 56 per cent of whom are grads, according to TODAY. It will be a gigantic change for them – unless it is only for new entrants.

It is right that non-grads get a lower starting pay. But once they start work, their exam results and what school they came from should be erased from the minds of their superiors. Everyone should have a chance to race to the top. It is only performance that matters in the workplace. I believe this is much the case in the private sector. It should be so in the public sector too.


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