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By the end of 2020, the progressive wage model (PWM) has been implemented for 4 sectors on a mandatory basis in Singapore, namely the security, landscape, cleaning, and lift & escalator maintenance sectors. The government further announced in August 2021 that it will expand efforts to implement progressive wages to uplift 283,000 lower-wage workers on an “accelerated timeline”. The target sectors were identified as retail, food services, and waste management sectors where the majority of the lower-wage workers are in.

Since October 2020, the Tripartite Workgroup on Lower-Wage Workers has been studying the retail sector first in the expanded PWM sectors identified. According to a Business Times article dated February 2021, it was reported that low-wage workers in retail may see their earnings rise if a study to implement the PWM in the sector bears fruit.

With salespeople and cashiers in supermarkets, convenience stores, and fashion outlets, this PWM implementation will benefit many in the retail sector. In the report by Tripartite Workgroup on Lower-Wage Workers published in August 2021, the implementation of PWM for the retail sector will benefit about 13,000 retail workers. This is in addition to the 28,000 low-wage workers already benefitting the workers in the 4 sectors named above.

It was reported that about 45% of resident full-time employees in the retail sector receive salaries that are at or below the bottom 20th wage percentile of the local workforce. Senior Minister of State for Manpower Zaqy Mohamad said in the same report that the retail sector is a diverse one with businesses ranging from sporting goods stores to supermarkets to fashion outlets.

Retail businesses that are tourist-driven are harder hit by the pandemic while those in the heartland are doing better. For example, the supermarkets particularly did very well during the early part of the pandemic, so it is necessary to review the different sub-sectors and look at the varied recovery carefully.

He added that the workgroup would have to study how to include eCommerce players in their discussions, and how to regulate the retail sector which is unlicensed.

Other concerns cited by the Executive Director of the Singapore Retailers Association, Rose Tong added that the timing for its implementation is a concern as full business recovery is not expected in the next 2 to 3 years. The move will result in rising business costs which retailers will be hard-pressed to absorb as she commented.

The Ministry of Manpower and Tripartite Workgroup has announced the PWM will be implemented in the retail sector with effect from 1 September 2022.

Questions

(a) Research the retail sector and examine the objectives of the Progressive Wage Model (PWM) that is being implemented in this sector. Analyze the objectives of PWM implementation from the government, employer, employee, and union perspectives. Discuss the key features in the PWM structure to be implemented in the retail sector.

(b) Choose a company in the retail sector with operations in Singapore and provide a brief profile of the company. Examine the external impact of government policy, market forces, and unions that are confronting the company that you have selected in the implementation of PWM.

(c) Discuss and contrast the internal alignment and external competitiveness policies in the pay model concept that is being applied to the PWM in your selected company. Illustrate using the salary data of a specific job family in the selected company to explain one technique in each of the above policies.

If the salary data of the selected company is not made available publicly, you can use salary data on compensation websites such as payscale.com or salary.com. You can also choose to use the progressive wage model as a reference for salary data to answer the intended discussion.

(d) Discuss any TWO (2) possible conflicts amongst the various stakeholders in the selected company while implementing the PWM into their pay structure. Recommend TWO (2)