What is the Progressive Wage Model (PWM)?
The Progressive Wage Model, also known as the Progressive Wage Policy, is a way to increase workers’ pay that focuses on their skills and how well they do their jobs.
Unlike a basic minimum wage, the main idea behind the progressive wage model is that as workers gain more skills and experience, their wages will increase accordingly.
In Singapore, the PWM has been successfully implemented in sectors like cleaning, security, and landscaping, significantly raising minimum wage levels by aligning them with job complexity and skills requirements. Similarly, Malaysia is set to pilot this model with 1000 companies in June 2024. This initiative aims to replace the national minimum wage in Malaysia with a system that encourages wage growth through enhanced skills and productivity.
Key Features of the Progressive Wage Model
- Skills Upgrade: Workers can move up a “skill ladder” by learning new skills, which helps them earn higher wages.
- Productivity-Based Pay: Workers earn more as they become more efficient and contribute more to their workplace.
- Fair Pay Levels: The model sets fair pay standards that increase as job roles and responsibilities grow.
Under this model, there is a clear wage ladder that shows how much a worker should be paid based on their skills, responsibilities, and job role. The wages start low for entry-level positions but increase as the worker gets trained and takes on higher-level roles.
