Progressive Wage Model: Over a decade of raising incomes and reshaping work

Singapore took a different path from the minimum wage model adopted in many countries.

Launched in 2014, the Progressive Wage Model (PWM) was designed to lift wages through skills upgrading, productivity gains and structured career progression. It links minimum pay to job responsibilities and mandatory training milestones, and is implemented sector by sector through tripartite consensus amongst unions, employers and the Government.

"PWM helps workers earn higher wages in a sustainable way," said NTUC PWM Implementation Advisor Zainal Sapari.

“Workfare will still play a role as a social safety net for vulnerable workers with PWM encouraging fair wages during their employment."

Today, PWM covers nine sectors and occupations, including cleaning, security, food services, and retail, and benefits more than 155,000 Singaporean and permanent resident workers.

Strong wage growth for those at the bottom

Wage inequality has narrowed, and the statistics back it up.

In sectors where PWM is mandatory, real wages at the 20th percentile increased by 24 to 39 per cent over the past five to 10 years, according to Mr Zainal. Between 2019 and 2024, real incomes at the 20th percentile increased by 5.9 per cent, outpacing median wage growth of 3.6 per cent.

"These statistics indicate that PWM-covered workers have seen wage growth outpace the median, helping to narrow the income gap. It is not a silver bullet, but as part of a suite of policies, PWM has been instrumental in reducing wage disparities," said Mr Zainal.

The scheme has since expanded to cover up to 90 per cent of full-time lower-wage workers. It operates alongside other national social support measures, including Workfare, the Local Qualifying Salary and the Progressive Wage Credit Scheme.

Skills drive upward mobility

Training is not just a requirement, it is a catalyst for change.

Under PWM, workers must complete sector-specific Singapore Workforce Skills Qualifications (WSQ) to climb the wage ladder.

According to Mr Zainal, this has improved productivity and job satisfaction, for example, in the cleaning sector where workers now use mechanised tools that require proper training.

In the food services and hospitality sector, Food, Drinks and Allied Workers Union (FDAWU) President Julie Cheong said PWM has helped casual and subcontracted workers.

"With fairer and competitive wages, employers find that retention rates have improved," she said.

In the security industry, PWM has prompted firms to adopt technologies such as virtual patrols and remote monitoring.

Union of Security Employees (USE) President Ardi Amir said: "Mandatory WSQ modules have enhanced officers' ability to manage disorderly behaviour and terrorist threats. Officers view PWM as a structured way to earn promotions and feel a stronger sense of purpose."

In the built environment sector, workers have become more confident and efficient after training in safety, sustainable practices and digital tools, said Built Environment and Urban Trades Employees’ Union (BATU) General Secretary Noor Irdawaty Jammarudin.

Challenges in the model

Challenges still remain even after a decade.

Mr Zainal said many lower-wage jobs are fragmented or outsourced, making enforcement and standardisation difficult.

"Employers, especially SMEs, often resist due to cost pressures and concerns about whether training truly translates into productivity gains," he explained.

Mr Ardi pointed to issues within the security sector, where agencies have deployed officers without the proper PWM ranks. He added that some building owners still prefer traditional manpower deployment over more efficient, tech-enabled systems.

Despite this, tripartite partners have worked to reduce compliance friction. Grants and co-funding schemes such as the Progressive Wage Credit Scheme have helped defray business costs, while Company Training Committees (CTCs) guide firms on job redesign and skills planning.

More than just a pay raise

The effects of PWM go beyond the payslip.

"Workers now have more confidence in planning for their families, saving for retirement or even taking short leisure trips," said Mr Ardi.

"They take pride in their work and in the skills they've acquired."

Ms Irdawaty said workers in her sector report higher morale and optimism.

She said: "They appreciate the transparency in career paths and feel more motivated, knowing that training leads to concrete wage progression.”

Mr Zainal added: "PWM instils pride and hope, two things no wage subsidy alone can offer."

Built to evolve

The question now is whether PWM can adapt to new labour realities.

Mr Zainal is confident the model is future-proof.

"Each sector must regularly review wage benchmarks, training standards and business realities," he said.

Digital tools, stronger enforcement and better alignment between training and real job scopes will be key to its continued success.

When asked about expanding PWM to gig and informal jobs, he said that would require careful consensus.

"PWM’s expansion and enhancement involve complex balancing acts between the aspirations of workers, constraints of employers, and the policy objectives of the Government."

Mr Zainal also warned against complacency to assuming that PWM has worked and no longer requires attention. "Economic shocks or political pressures can also derail progress if not managed carefully."

A model grounded in tripartism

At the heart of PWM is co-operation.

Mr Zainal credited former NTUC Secretary-General Lim Swee Say for laying the groundwork.

"He believed we could create a Singaporean solution that was both pro-worker and pro-business.

"Tripartism is the bedrock. Without trust and collaboration between the Government, unions and employers, PWM would not have succeeded," he said.

To future union leaders and policymakers, Mr Zainal’s advice is simple: "Never lose sight of why PWM was created—to uplift lives with dignity. Be bold in vision but grounded in reality. Wage growth is not just about numbers; it’s about empowering aspirations."