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Posts Tagged ‘NTUC’

The baby, the bathwater and the bathtub

In News Reports, Politics on May 2, 2015 at 12:24 am

Everybody is reading tea leaves again. You can be sure that every time the Prime Minister opens his mouth from now, people will speculate on whether it would be an early election held way before January 2017. I have given up guessing dates but my tea leaves, or rather coffee grounds, tell me that all seats will be contested and eyes will be on wards bordering the Workers’ Party cluster in the east. At least, I sure hope so….I live there!

So what can be gleaned from PM Lee Hsien Loong’s speech on May Day? It was all about exceptional leadership, like the sort his father and the first generation of ministers provided. And the difficulty of recruiting good men and women into leadership positions. He didn’t say that they would be for the People’s Action Party – presumably because it’s a given. In fact, he hardly mentioned his party at all except when he reminisced about the late Lee Kuan Yew’s early days with the NTUC.

He has set the agenda for the next election: “..leadership renewal is the most important issue. It is not doing more or spending more as some would like you to think. It is who will lead Singapore into the future and it is our future at stake and our children’s future. Because if this government fails, what is going to happen to you, to all of us to Singapore?’’

The thing about leadership renewal as a mantra is that it has been the case for nearly every general election that I can remember save the years when the PAP put the elected presidency and the need for MPs who can run town councils centre-stage. Of course, there were plenty of other issues the PAP threw in, like vote for upgrading and deny racial politics ecetera.  But the theme of getting a team in place for the future is like listening to a tape recorder after re-winding.

Is it going to get any traction? Can it compare with the WP’s theme of needing a check in Parliament? Remember that Singapore lost a Foreign Minister in George Yeo. That’s a high profile job that is responsible for Singapore’s high profile on the international stage. Despite expressions of Mr Yeo’s exceptional ability, the PAP couldn’t fight the WP tide.

I suppose one reason leadership renewal might resonate now is that PM Lee isn’t getting younger. He’s 63. Leadership renewal was less of an issue during PM Goh Chok Tong’s time was because we all knew who was going to take over his job when he stepped down. Now the guessing game isn’t just about when the GE will be held, but who is going to step up to the PM’s plate. (You realise that we no longer have a First or Second DPM? Both Mr Tharman and Mr Teo are equal players although it is Mr Teo who steps up in the PM’s absence.)

The other issue is what it means to have an exceptional team.

PM Lee said this of the outpouring of emotion from the people when his father died: “I think his passing reminded people that exceptional leadership made a big difference to us and I think it has caused many people to pause and to ask ourselves are we sure we don’t need that kind of leadership any more, that quality of leadership anymore. Of course Mr Lee did not do it alone. Part of his greatness was that he brought together exceptional people to form an outstanding team.’’

As evidence, he also cited the numerous foreign leaders who came for the funeral and even flying their own national flags at half-mast.

So is PM Lee talking about “tough love’’? Hard truths and no holds barred kind of leadership that the late Mr Lee epitomized? He was after all, not a “gentle father figure’’ but a hardnosed mobiliser and, some might even say, hardboiled mobster.

I don’t think the late Mr Lee was the right leader for the turn of the century but I have sometimes wished that he had come out to lay out the law of the land and just point the waaaay. This is especially so when discussion gets too fractious.

I really want to know, for example, what was it that the late Mr Lee wanted to say in Parliament post-GE which his son didn’t allow him too. My guess is that it’s some kind of harangue about navel-gazing and going on about COEs and property prices when the world is out there ready to eat our lunch. The PM told his father that he and his team would handle it by themselves.

This is pure guesswork but I suppose he thought Mr Lee might do more harm than good by speaking up to a population which is no longer dominated by the first or second generation Singaporeans. Also, he wouldn’t want his father to help bolster him and the younger lot, and risk looking even weaker especially after a weak showing in the GE. Just saying.

There is another point in his speech I found disconcerting. He talks about how Mercedes still needs Lewis Hamilton to win the F1 championship even though it has an outstanding car. “The car can’t drive itself.’’ So those people who think it’s okay to try out a different team to lead the government because there is still the civil service to run the show should be “very careful’’.

Hmm. The civil service SHOULD be able to run the show despite a change of political masters no? That’s how it works elsewhere, so why can’t it work here? What is the relationship between the civil service and the government-of-the-day, especially when so many ministers are ex-civil servants?

I ask this because I was very taken by the speech made by Public Service Commission chairman Eddie Teo published in the media last week:

“The distinction of the role between the politician and public servant has started to become blurred.

“The upside is that the politicians will have strong support from public servants when they need to sell government policies. But the downside of the change is that it will be more difficult for the public servant to behave in a non-partisan manner as the public will see him as intrinsically linked to the ruling party, perhaps even occasionally justifying the party line. It was not an issue in the early days because the old-generation public servants never had to worry about another political party taking over government from the PAP.

“But GE 2011 has caused some of our younger public servants to worry about what to do if there are more and more opposition MPs in Parliament or even if there is a change in political party, and not just in government, maybe a few general elections from now.’’

There is something very wrong here. Are the fates of the civil servants so inextricably tied with that of their political masters that we have to be “very careful’’ if we exercise our right to put in a different political team? We risk the country going down the drain because the civil service can’t function as well with someone from a different party? Surely, ministers are NOT super civil servants.

You can already see attacks on the civil service when something untoward happens in the Workers’ Party town council. There is a perception that civil servants might not be even-handed in its dealings with the PAP and WP town councils, with those living in the opposition wards being worse off. It might be an unworthy perception but it is one that will dog the civil service if the distinction of the role between the politician and public servant is not clarified. We can throw out the party in power because we disagree with its politics or politicies but we must always be able to have faith that the civil service can and will carry on on behalf of the people.

It got me thinking about the NTUC. What happens to the NTUC should the PAP lose more seats or even lose power? Maybe nothing as the symbiotic relationship is between the PAP and the NTUC, which is like a holding fort for some would-be candidates and a testing ground for others. (Note: symbiotic is not tripartite which is G-employer-union.) I once asked Mr Lim Swee Say about the relationship and he said there were non-NTUC unions as well and opposition parties are free to tie up with them or form their own version of the labour movement. Interesting.

So PM Lee is right about being “very careful’’ about our vote. Throw out the bath water (the PAP) and the baby might go as well (the civil service) – and we also risk over-turning the bathtub (the NTUC)?

He might be right but it doesn’t seem right, does it?

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KISS: Keep it sweet and simple

In Money, News Reports, Politics on March 11, 2015 at 12:06 pm

I think everyone wants to know how they can use that $500 the G will give under SkillsFuture and for what sort of training. I guess the details are going to be worked out. Already there are calls to expand the programme, so that senior citizens can pick up new hobbies, for example. Already there are complaints that the money is too little for any real specialized training. Most people forget that some courses are subsidized and if you are above 40, the courses are subsidized 90 per cent and that $500 might well be enough to defray the cash portion.

Thing is, we have to be clear what SkillsFuture is for. It’s not to take up any old course but to help advance your current skills set and for those in a rut, pick up skills that might help them move into a second career. In fact, I can imagine a whole new industry of trainers of basic and esoteric skills asking for WDA accredition so that their courses will come under the SkillsFuture.

So the idea is to have individuals take control over their own training although how they are going to get time-off from their employers is another thing altogether. Seriously, SkillsFuture is useful for those who are already thinking of going for courses and can work out the timing on the own. For the vast majority, they will have to be pushed. Or their bosses have to be pushed.   Methinks it makes better sense to expand the current incentives for companies to send their employees for training and have the G pick up even more of the tab for this. Okay, I know this will be unpopular but there should be a bond attached so that workers won’t jump ship after they get another certificate or diploma. I’m sure that is a reason employers balk at sending their workers for training – best to get the most out of their workers NOW than waste time getting them trained for some other boss.

Not so long ago, the NTUC suggested setting up a SkillsSave account for every worker. I suppose the SkillsFuture programme is something like this. I think the G should go further and consolidate all its “training’’ programmes into one – from cradle to grave. So there is the Child Development Account run by the Ministry of Social and Family Development, which morphs into the Post-Secondary account run by the Education ministry and now SkillsFuture run by the Manpower ministry. Doesn’t it make better sense for all these schemes to come under an individual’s name? And on retirement age, what leftover will go into….voila! the CPF Retirement Account!

I mean, wouldn’t it be wonderful for citizens not to have to remember so many things and have the G streamline as many of its policies as possible and adopt its much vaunted whole-of-government approach?

The Budget – and my two cents worth

In Money, News Reports, Politics on February 24, 2015 at 3:51 am

First, an announcement: Sin taxes have NOT been raised. I guess that’s a small reprieve for those who smoke and drink, especially those who are unhappy at not being able to drink in public places after-hours…There’s nothing on property either, so your home is safe…

Okay. That was just an attempt at light-heartedness.

So what is it about the Budget that will make anyone, including me, happy? I am UNhappy that my CPF contribution rate is going up, although the euphemism used is “normalised’’. Having enjoyed a little bit more take-home pay for a few months after turning 50, that little bit is going to go back into CPF. The plus point is that my employer also has to pay its 1 per cent portion. Yes, yes, I know all the big picture arguments about retirement adequacy…Still I was hoping that only the employer contribution rate went up, not mine!

That’s the trouble isn’t it? We’re all looking at what’s in it for us.

Drivers are fuming at the extra duty on petrol, after enjoying lower petrol prices over recent months. Even though the higher duty isn’t going to push pump prices back up to where it was, it just seems like a little windfall has been taken away. Then comes the argument: What is all this about taxing road usage, rather than ownership then? Point to ponder: The G needn’t have upped petrol duties, but upped ERP rates instead – and earn curses everyday from drivers who have to pass through gantries. Petrol duties are….well…subtle.

Actually much of Budget 2015, dubbed the Jubilee Budget even by the PM, was anticipated:

– The CPF review panel and the NTUC recommended the “normalisation’’ of CPF contribution rates for older workers, and so it happened.

– The panel also suggested raising the CPF salary ceiling from $5,000 to $6,000 while  NTUC wanted it in two steps – in $500 increments. The G did it in a single bound.

– The NTUC wanted some kind of training account to encourage workers to upgrade. It happened. The SkillsFuture credit is going to be set up with $500 in the first instance. And those aged 45 and above can get up to 90 per cent of their continuing education courses subsidized. I suppose we’ll hear more about how this “credit’’ will be administered. Maybe a sort of Edusave account for workers?

– Businesses wanted a moratorium on foreign worker levies. It happened. They are “safe’’ for two years although Finance Minister Tharman Shanmugaratnam made it plain this was no rewind, just a pause.

– Businesses wanted more restructuring support, such as the continuation of the Productivity and Innovation Credit scheme and Wage Credit Scheme. They’re still alive, although the co-funding portions have been lowered. Nothing was said about monitoring or tracking the usage of PIC which, I suppose, will be raised by the MPs. Nor was more said about driving up our dismal productivity figures, which I thought would feature majorly…

– The Silver Support scheme announced during the National Day rally was fleshed out, with about $600 going to seniors and up to $750 to the really badly off group every quarter. Now, that’s a windfall. The G seems to be conscious about how people will grumble about eligibility criteria and has decided on a mix of past income, household type, level of support. The Manpower ministry will sort this out. I wonder why. Shouldn’t this come under the Ministry of Social and Family Development?

Now for what’s not anticipated:

At the low end:

Although the CPF review panel had suggested raising the salary ceiling and older worker contribution rates, it didn’t dwell very much on the issue of retirement adequacy. It’s been getting some brickbats for this. After all, there’s no point tweaking the nomenclature surrounding the Minimum Sum if people don’t have a minimum sum to speak of. Now, the G has loaded another 1 to 2 per cent interest for those with low CPF balances. I wonder how this will pan out in concrete terms – how many people will achieve the minimum sum levels when they hit 55?

At the high end:

The higher personal income tax for top earners hadn’t been expected, and seems to be bucking the trend of lower income taxes worldwide. It has always amazed me that so many people here do not pay tax at all. BT says 90 per cent of the people here account for just 20 per cent of direct taxes (GST is an indirect tax). I guess some people will sniff and say that the G “taxes’’ in other ways, through levies and fees ecetera.

With these changes to make the system more progressive, I had expected the term income inequality to be used and references made to the Gini co-efficient. Instead, Mr Tharman took a big sweep of history talking about the rise in median incomes since 1965 and how they compare with other countries. Conclusion: We’re better-off. The “median Singaporean worker’s wage” (Mr Tharman didn’t say how much) is now the highest among the Asian newly industrialised economies and just 10 per cent lower than Japan. Over the past decade, “median household income per person” has increased, in real terms, by 36 per cent, he said.

I am no economist but I gather there is some concern about Temasek Holdings being included into the Net Investment Return framework. In case you don’t know what this means, here’s, hopefully, an accurate idiot-proof version: Currently, when MAS and GIC invests money, there is a return on investment that is projected/calculated. Half of this “projection’’ – whether it comes through or not – can be used by the G. Now, the concern is whether Temasek belongs in the same category as MAS and GIC which both invest conservatively. Temasek is supposed to be more “adventurous’’ – so you can’t be that sure about returns. I guess it’s a way to bolster our revenues and, another guess, to show detractors that Temasek’s money is being put to public use.

As I said, I am no economist but it does look like a lot of long-term thinking went into the budget. Some will say it is the work of civil servants. Even if so, I would think they would need some political direction. I frankly don’t care if it’s an election budget or not – oh, we’re all still getting GST cash rebates – but it does make me ask myself if any other political party will be able to produce a Budget that is so wide-ranging and finely-calibrated.

Anyway, let’s see how the MPs do during the debate on the Finance Minister’s statement. I hope they will cut to the chase and raise pertinent issues rather than merely laud it with nice-sounding adjectives. In other words, I hope to see, in productivity parlance, some “value-added’’.

Dear PM, can you pass me your minister?

In News Reports, Politics on January 24, 2015 at 4:21 am

I wonder which country in the world has a labour movement which writes to the head of Government to ask that he release an office-holder so that the man can vie for office in the…labour movement. But I guess it’s better than the parachuting of an unknown into a big office on someone’s say-so.

It says much about the symbiotic relationship between the G (or is it the People’s Action Party?) and the NTUC, that no one has said anything about the above “poaching’’ process. One guess is that the concept is so in-grained or well accepted  that nobody talks about it anymore. The vision of the union and the G is aligned, and leaders move in and out. They even maintain offices on both sides of a (non-existent) fence!

So Mr Chan Chun Sing is the man of the moment. The PM has said okay and Mr Chan has to win the votes of delegates in October to get the top job of secretary-general. We all know that the head of the NTUC has to be politically acceptable. As well as the ability to win the hearts and minds of workers. So both have to go together.

There is a precedent in the form of Mr Lim Chee Onn, once the flavor of the month and among the front-runners for the premiership. Although he got the top job with the blessings of the political leadership, he was removed as the secretary-general because his leadership style rankled on the rank-and-file. I’m basing this on memory because I’m having a hard time researching the background. I’m not sure if he was removed at a conference or simply told to step aside in favour of someone more palatable, in this case, the late president Ong Teng Cheong.

I am among those who were surprised at the choice of the NTUC central committee. MSM reports that even unionists were surprised. In fact, I am more surprised that there has been no successor groomed for Mr Lim Swee Say’s job after all these years. Nobody knew that Mr Lim was going to turn 62 soon and has to retire? Its current crop of deputy/assistant sec-gens not good enough?

As for the choice of Mr Chan, the surprise is that a career civil servant whose only experience has been in one “unique” sector, the military, should have been the choice of the key union leaders. Perhaps, it is because he heads the Ministry of Social and Family Development, which deals with bread-and-butter issues of the less privileged that makes top union leaders think he is a good choice? It cannot only be because he drinks coffee with taxi-drivers; he’s an advisor to the taxi drivers’ unions. Or because he can adopt as folksy a manner as Mr Lim?

All I can say is that we seem to have an amazing paucity of talent, so much so that established institutions here have to raid each other, like companies poaching in the private sector. Or is there a bigger, long-term objective in sight, such as Mr Chan is being tested for an even bigger job. Much as Mr Lim Chee Onn was. Getting the endorsement of the labour movement, which has nearly one million members, is a big deal. Given that Mr Chan is a first-term MP, you might call this “hot housing’’.

Okay, I am rambling. Sorry.

Anyway, I have always liked Mr Lim Swee Say, since the days he was an officer in the Economic Development Board. Power and position hasn’t changed him one bit. I liked him even more in the past few years for what he was doing for the labour movement. For too long, I’ve always thought the NTUC was placing too much focus on the “social’’ aspects of its mission, such as setting up its “finest’’ supermarkets and pre-skools which it can’t spel, instead of the “organising’’ aspects of a trade union. It should be looking at wages, recruitment and workplace practices. I blame the union for not detecting the long stagnation of wages at the lowest levels.

But I can see more “organizing’’ work done in recent time. It has managed to pry open the two integrated resorts and unionized their workers. It has tried to rectify the low wages of some sectors by combining a wage floor with a productivity ladder. It has pushed for $50 salary raises within the National Wages Council. And it has finally managed to get PMEs under the labour movement’s umbrella. I still think it needs to do a better job of selling the “re-hiring’’ of older workers to the people. That is not about working till you drop dead, but about being able to work beyond a certain age if you want to.

It has also always been a source of wonder to me that the NTUC does not have its own labour experts in a strategic policy unit who can crunch the numbers on wages and employment. The labour movement should be leading the charge, rather than depend on the statistics and pronouncements of the Manpower ministry.

If Mr Chan does get the vote in October, I hope that he will carry on the organizing aspects of the movement. After all, he has headed a big organization like the military and is now the PAP organizing secretary. Perhaps, under his charge, the NTUC will be the first thing that comes to the minds of workers who feel they have been short-changed in some way. And that it is not just a place to buy groceries.

It remains for me to wish Mr Lim and Mr Chan all the best!

CPF – Complicated Problem to Fix

In News Reports on January 23, 2015 at 1:58 am

TODAY had an interesting way to describe one of NTUC’s proposals to tweak the CPF system. It described the suggestion to let those with less than the minimum sum take out 20 per cent on top of the $5,000 that they are allowed to when they turn 55.

Eye-catching indeed and doubtless welcomed by those who want their CPF returned to them to fund other expenses or even a holiday. But what happens then to their monthly payouts under CPF Life? Much smaller than before? And what happens to the payouts for the rest of CPF members who kept their money in the fund?

The NTUC suggested “incentives’’ to get people to keep their money in the CPF but one labour economist said this would have “marginal utility’’. People would be expecting more and more incentives over time. And frankly, can’t the money be better used to bolster health care or pump up the wages of those who need the money?

I guess you would expect the labour movement to weigh in on behalf of the working class. It has tried to do so, but like all policies, any change would have an impact on some other part of the whole. And you can’t ever satisfy all the people all the time.

I was also thinking about another “eye-catching’’ proposal – shave off the 2 per cent difference in CPF contributions between those below 50 and the 50 to 55. I have to confess that I was flummoxed when I realized that my take-home pay as gone up. And then realized is because I had just turned 50 and hence do not have to contribute as much to CPF. Then again, neither does my employer. So wonderful. I’m glad that I don’t need my CPF Ordinary Account to pay for my housing…

Here’s the problem: The rates were shaved to make old(er) people employable because employers won’t have to pay them as much – something which the labour movement surely welcomes. Then again, the labour movement wants people to have more money for retirement. What a conundrum!

Of course, this eye-catching proposal is viewed as “hair-raising’’ by businesses who see only a rise in wage costs at a time of restructuring.

Then there is the proposal to raise the cap on wage contributions from $5,000 a month to $6,000 and to do this in two $500 parts. The reason is because the 80 percentile of wage earners have been designated as the ceiling. And that hit $6,000 in 2012. Hmm. Interesting. I didn’t know about the 80th percentile factor and the proposal looks like simply a logical adjustment. But what is the impact really of the rise? I wish the labour union elaborated on this. More money for future retirement and less money for present needs? What sort of impact will this have on people who have to pay off housing loans?

There is also the 1 per cent extra interest given to those with balances of less than $60,000. NTUC wants the cap reviewed. According to ST today, it wants it doubled, to $120,000? I don’t think anyone minds more money. But do we really need to do more for those who are better-off – or give more to the lower income? How many people are we talking about with balances between $60,000 and $120,000 anyway?

Policymaking is quite an interesting exercise especially when there are so many good but conflicting priorities. I can’t wait to see what sort of proposals the CPF review panel will come up with that will satisfy all, or at least most, CPF members.

Climbing the corporate ladder – systematically

In Money, News Reports on November 13, 2014 at 12:08 pm

There’s a story in MSM today that you probably missed. It’s to do with the progressive wage model. Sounds “blah’’ I know but I have been trying to wrap my head around this concept that the labour movement has been promoting for some time now. Most of us would probably associate the model with cleaners who now operate with a minimum wage floor that will go up when they obtain skills or can do “high-order’’ work. More recently, the security industry was announced as sector number 2, to begin in 2016, to be followed by workers in landscaping. I can understand the need for a wage floor for the lower paid because they simply are paid too poorly. In fact, for cleaners, adoption of the model is part of a licensing scheme that all cleaning companies must get before they can bid for contracts.

But I can’t seem to wrap my head round why other better-paid sectors would need it. So the NTUC is happy that nearly 270 unionised companies have come on board to adopt the model, which is basically a career and wage progression ladder. I would have thought private sector companies, especially the big ones, would have human resource departments which have already mapped out how their employees should be assessed and paid or promoted. It seems the private sector already does plenty of merit-based promotion and payment but the labour movement wants to make this process more systematic and transparent. I wonder how many companies actually want to tell their employees how they promote and pay people. After all, this an important lever for a company to get more from its workers. And would they want to be bound by a wage structure that says when and how they should promote? Seems to me a bit like tying the hands of employers. At the very minimum, they have to abide by a wage floor for employees.

Looking through the case studies presented by NTUC at its conference yesterday, I was surprised that Singapore Airlines and SMRT were among the companies that have recently adopted the model. SIA promotes not just on merit, but also level of competency. Here’s what its human resource person said: “In the past, promotions were hard to come by. People had to wait for vacancies to arrive through resignation. Our staff are loyal so the attrition rate is low, as far as our general staff are concerned, so you had to wait a long time for vacancies to arrive.” Since it implemented the model, it has promoted 85 general staff.

I guess that’s a point in employees favour. Too often, they look up at the seniors in the company hierarchy and wonder when they will be pushed off their perch so that a vacancy is available. It must be pretty demoralising for a young person to see so many not much older people above him on the ladder. It’s a temptation to job-hop, to seek better prospects elsewhere. Yet, I wonder too how the companies feel about having a bigger and bigger wage bill, unless of course, it is accompanied by bigger and bigger output.

It seems some people in the F&B sector are taking on the model with a starting pay of $1,300 a month for service crew, instead of $1,200 a month. Instead of five levels to the top, which is Operations Manager, it created another two rungs in between. I think employers will have to keep persuading staff that this isn’t a way to slow down progression, which will be how some people will see it (as road blocks rather than rungs). I had a look at the ladder and the good thing is that the top level can stand to earn at least $4,500 a month instead of the current maximum of $3,800. Of course, how long it will take to get through seven levels instead of jumping through five….It seems that the labour movement wants these companies to be a nucleaus of sorts to infect the rest of the sector and has set up tripartite sectoral committees which will decide on wage increments and any changes to the ladder. It’s like price-fixing with a floor, except that both employers and unions have a hand in it.

I asked NTUC why employers would even want to be part of this and the answer that came back: Labour crunch. Employers would want their workers to stay on rather than job hop to the next employer who pays $10 more. I suppose in this full employment period, this is the best time to press employers to raise wages in accordance with skills and more or better service. I hope though that it isn’t the case that just because someone has a diploma or two, it means an automatic push up the ladder. Because it can turn the phrase “life-long learning’’ into a weary paper chase. And we thought we left school a long time ago!

Who guards the security guard?

In Money, News Reports on October 30, 2014 at 7:41 am

So it seems that we have 33,000 security guards, but we need another 10,000. What’s odd is that there are 70,000 people here who are already trained to be security guards. Just that no one wants in because of low pay and long hours. You would have thought that one way is to raise pay and get more people into the business. But the solution, for a very long time, seems to be: give them low basic pay so that they will work extra hours or overtime to cover for that lack of manpower! Sounds so counter-intuitive. In fact, some security firms actually ask to be exempt from the law which limits overtime work to 72 hours a month. It’s more usual for them to work 95 hours of OT each month. No wonder you get rather bleary-eyed security guards. Cleaners get low pay too, but I haven’t heard complaints about long hours.

The G and the labour movement wants to subject the security industry to the same regime as the cleaners, that is, a minimum starting pay scale which will go up progressively as the guard acquires more skills. There are five rungs in all. Seems to me it’s rather more important to fix working hours. Or maybe their connected.  They usually work 12 hour days, six days a week to take home about $2,000 or so a month. If they didn’t do overtime (which is about 1.5 times the hourly rate) you wonder how they keep body and soul together because basic pay is about $800 a month. I can’t imagine a sole breadwinner or a family man taking on the job willingly, especially if there are no career prospects.

I guess if basic pay moves up, and overtime pay goes up in tandem, there won’t be so much need to log/slog long hours. Also, more people – Singaporeans and PRs –  might be wooed back into the industry and we will finally have enough people helming regular working hours. (Yup, this is one industry that is closed to foreigners.) Is this too optimistic a scenario? And how long will it take? Will it still be shunned by locals, like cleaning jobs and dishwashing? After all, there will still be shift and weekend work…

So what happens in Sept 2016 when the new rules kick in? And why wait so long anyway? It seems that some contracts are already in play which would be hard to unwind, but more importantly, it’s to give the guards time to bone up and get the requisite qualifications to make it on the higher rungs. It does seem that the $1,100 a month basic pay might be rather too low in two years’ time given that we’ve been told that inflation is going up. But I gather that this is not a cast in stone minimum figure, it’ll go up along with whatever the National Wages Council recommends every year.

Actually, the G and the NTUC has an easier time of it because the firms are already subject to annual licences administered by the police and Manpower ministry; licensing is a new thing for the cleaning industry. Yet you sort of wonder how security firms even managed to get their licences renewed in the past. There’s an A to D grading system that looks at security operations and working conditions and a firm has to hit D twice to have their licence put in the freezer. Now, there will be a new set of rules attached that will make sure employers stick to what is known as the Progressive Wage Model.

Again, I can’t help but think about how mean we have been to our cleaners and security guards. Yes. Us. We won’t pay more for them to guard our malls, carparks and condos. So the building committees put out a tender and the firms start under-cutting each other to land the job. And since manpower is the biggest cost, the salaries never go up and working hours just get longer. You keep wondering why the firms don’t just get together and fix prices, except that this would be anti-competitive. The market works for the end-user but penalises the worker.

I have been reading the fine print and wondering if people will be willing to pay more for a security guard. I mean, we all like to wring our hands; pulling out our wallets is quite a different thing altogether. Seems end-users do get some kind of help to pay for the higher wages – up to 50 per cent of the increase. So it’s not a big jump. And the firms can also dip into a fund that will pay for technology to help them in their work. This will benefit the forward looking firms who don’t mind juggling rosters and re-designing the job – why have four security guards when you can have one guy in front of a screen monitoring entrances and exits and one or two others on patrol?

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

Who’s the boss?

In Money, News Reports, Society on August 4, 2014 at 11:35 am

There is a security guard in my condominium who has changed into four different sets of uniforms over the past nine years. We insisted that he be kept on even as we switched security companies. I always wondered if he got a pay jump each time this happened. I hope so since residents viewed him as such a part of the environment. Then again, I have no real idea of how much we pay each company. I figure it’s probably less and less over time.

So I read in ST today that the labour movement was going to give a second shot at getting the security industry to sign up on the progressive wage model with some interest. Seems the industry rejected it the first time because of cost pressures. Yes, wages will have to go up. But it won’t be the security companies who will be doing the paying. It will be the managements of malls, condominiums and office blocks. So what’s the problem? The rest of us? We won’t pay a higher contract price for security service? We always go for the lowest bid by some fly-by-night operators?

Then I got to thinking that maybe the progressive wage model might not be well understood in the first place.

Here’s what I understand about it:

It looks much like a minimum wage structure, except that it isn’t. There’s a base, such as $1,000 a month for cleaners and a proposed $1,100 a month for security guards. But there’s also an increasing scale of higher pay for higher level skills and higher productivity. Also, for certain kinds of work, you need certain skills and those on the progressive wage model will be armed with certificates which say what they are capable of doing. And this would correspond with the pay grades that have been set.

This is really intervention in the free market, with the G playing enforcer. Cleaning companies who won’t or can’t sign up to this new “industry standard’’ can’t get a licence from the National Environment Agency. They must have this by Sept 1 if they want to continue to be in business. This is a legal thing with penalties, not a guideline or a code of ethics. It seems that as many as four in 10 aren’t ready. Which means they will fold. Which means what for their workers? Move to another company which is on the model? Good for them because they will be assured of higher pay? Especially if they have something to show for skill level?

That doesn’t seem bad at all

The whole industry gets an immediate lift and there will be no more under-cutting of contract fees because there will be no more fly-by-night cleaning companies. And companies will think harder about kicking out people whose pay got too high by dint of years of work and replacing them with fresh blood at the minimum wage. At least, I gather that’s what will happen. Except that everybody who uses cleaners, including town councils, will have to figure out how to pay them more – since a higher baseline will have been set.

I’ve always wondered about the productivity measurements though. Just because you are sent on a course to use certain machines, does this mean you will actually be more productive than before? What if you are employed in a role which doesn’t need more sophisticated handling? Or you are more likely to damage the machine than make use of it well? Still get paid more because you have the requisite qualifications? It will be interesting to see what happens to the cleaning industry after Sept 1.

And now the security companies seem more amenable to the idea, probably because there are so many shady outfits able to put in much lower bids – which their clients are willing to pay for. A third sector in the NTUC’s sight is landscaping. All in, that’s about 200,000 of our lowest paid workers who make a median salary of $800 or so a month.

Sometimes I wonder if we realise that it is we, the people, who put them in that position by keeping their salaries stagnant for years. Those of you who live in condos, do you think you will agree to pay more to the cleaner, gardener and security guard? What will HDB residents say about having to pay more for service and conservancy fees? The money has come to somewhere. The phrase often used is “cost will be passed to the consumer’’ but that’s not accurate.

Because most of us are really the paymaster – not consumer. It’s good to remember that some time.