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A progressive wage model (PWM) has been a point of discussion for the Malaysian government in recent months. Rafizi Ramli, Minister of Economic Affairs of
A progressive wage model (PWM) has been a point of discussion for the Malaysian government in recent months. Rafizi Ramli, Minister of Economic Affairs of Malaysia, recently shared that the government is studying the PWM model that has been implemented in Singapore. The PWM model is mostly used in jobs where salaries do not rise very much because productivity and the value-add of the work are difficult to improve, opined Professor Geoffrey Williams, an economist at the Malaysian University of Science and Technology. Writing in Free Malaysia Today, he added, "The idea is that the wage will increase if workers enhance their skills, which hopefully would improve productivity to compensate employers for paying higher wages." Figure 1 depicts an example of the adaptability of PWM in Singapore. Implementation By regulations, failure to comply will receive warning letters or fines. The example of the implementation in cleaning sectors as follows: What is it? Minimum wage set at a specific industry for entry-level workers, and gradually increases as the workers are trained and experienced. The model maps out for workers a career path that factors in wage increase when the workers upskill and become more productive Who will it impact? As of November 2022, there are 5 sectors currently in the effect of PWM: - Cleaning sector - Security sector - Landscape sector - Lift and escalator sector - Retail sector The future sector to be included: food services and waste management increase when the workers upskill and become more productive - Retall sector The future sector to be included: food services and waste management Traditionally, salaries of workers in the selected sectors tended to be low and stayed low because companies gravitate towards hiring cheap unskilled workers. The low wages in turn resulted in high turnover and labor shortages. PWM is a wage structure that attempted to reduce the issues. Figure 1: Adaptability of Progressive Wage Model (PWM) in Singapore. (Source: Ministry of Manpower Singapore) "Judged against these criteria, the PWM is not a panacea and there are simpler ways of achieving the same thing," Professor Williams concluded. "A reverse income tax as a form of universal basic income or enforcing the minimum wage and increasing it in line with inflation are both easier and universal and it serves as an incentive for employers to manage their wage increments and business models better." (Source: HRM Asia, 2023 - Partial news) Based on the case study above, answer the following questions: (i) The progressive wage molel has been considered a success in Singapore; do you think it will be feasible to apply it in the Malaysian context? Justify your answer. (5 marks) (ii) Assuming that the PWM is implemented in Malaysia. What do you think are the potential advantages of PWM in improving the employees' performance? (5 marks) (iii) From the employers perspective, in what way do PWM could benefit them
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