The man who built ladders: Lim Swee Say on why PWM beats minimum wage

When Lim Swee Say joined NTUC in 1996, he noticed something troubling about Singapore’s success story.

While the nation was thriving economically, a group of workers seemed stuck at the bottom.

“I noticed that there was a group of workers in Singapore that needed extra support, extra help, and that really is our low-wage workers,” he recalled.

What started as an observation would eventually become a revolutionary approach to worker empowerment that has transformed the lives of over 155,000 Singaporeans to-date.

In a 2018 interview with LabourBeat, Mr Lim reflected on how his early experiences shaped his understanding of workers’ realities.

Fresh from his role at the Economic Development Board (EDB), he told union leaders about Singapore’s impressive $24,000 per capita income, expressing pride in this achievement.

A union leader interrupted him: “Comrade Lim, let me stop you here. Please remember that you are no longer with EDB. In the Labour Movement, if you tell our workers this point about per capita income being $24,000, our workers, our members, will ask you, ‘Where is my $24,000?’”

That wake-up call taught him that “it is not just about the big picture. It is about how we translate the progress in a tangible way to the individual.”

His resolve was further tested during the 1997 Asian Financial Crisis, when 29,000 workers were retrenched in a single year – an experience he described in a 2020 Budget speech as helping the Labour Movement realise they needed better systems to support workers during economic disruptions.

Building the foundation: A 16-year experiment

The Progressive Wage Model (PWM) didn’t emerge overnight – it was the culmination of a methodical, evidence-based approach spanning nearly two decades.

The first ladder: Skills (1996)

Mr Lim noticed that while Singapore had an excellent education system, rank-and-file workers lacked a proper skills upgrading structure.

A worker could receive 10 years of company training, but if they changed jobs, none of it was recognised by their new employer.

The solution was the Skills Redevelopment Programme (SRP), launched in 1996 with two revolutionary features: all training led to industry-recognised certification, and the government supported both training subsidies and absentee payroll.

Starting as a $10 million pilot for 1,000 workers, SRP proved so effective during the Asian Financial Crisis that the government expanded it to $50 million.

It eventually evolved into today’s SkillsFuture programme.

The second ladder: Jobs (2000)

As Environment Minister in 2000, Mr Lim tested a new approach with hawker centre cleaners through the “1000 by 1000” initiative – helping 1,000 cleaners justify salaries of $1,000 per month.

“The way to do it is on the one hand, leverage on the skill ladder that we have, but equally, if not more important, is to redesign their job, give them not just a proper skill, but also give them the proper tools and the proper working environment,” he explained.

The programme proved that with better skills, tools, and job-design, lower-wage workers could justify higher wages through increased productivity.

The third ladder: Productivity (2005)

Returning to NTUC around 2005, Mr Lim expanded job redesign into a national programme called the Job Recreation Programme (JRP). Through mechanisation and automation, workers could do their jobs better and more productively.

By 2010, with three proven ladders in place, Mr Lim felt ready for the final step.

“Come 2010, we felt it was timely to put them together. We take the skill ladder, we take the job ladder, and the productivity ladder, put them together, and then we add on the wage ladder – that’s how PWM came about,” shared Mr Lim.

The ‘three lows’ trap

Singapore’s reputation as a clean, green, and safe city came at a cost. The workers who maintained this world-class standard–cleaners, landscapers, and security guards–were stuck.

“Our workers in the clean, green and safe sectors are trapped in what we call ‘the three lows’: low skill, low productivity and low wages,” he said.

The culprit? A race-to-the-bottom mentality. Instead of proper outsourcing based on service quality and worker welfare, customers engaged in “cheap sourcing” – simply awarding contracts to the company that offers the lowest quote.

This vicious cycle meant that the very people who upheld Singapore’s international reputation were among its lowest-paid workers.

Why minimum wage wasn’t the answer

When critics ask why Singapore didn’t simply adopt a minimum wage like other countries, Mr Lim has a ready answer: “Minimum wage has been around for many years all over the world, but lower-wage workers are still facing the problem of low wages.”

His analysis revealed three fatal flaws with minimum wage systems.

First, setting it too low serves no purpose, while setting it too high risks pushing vulnerable workers, especially older workers, out of jobs entirely, turning them into ‘no wage workers.’

Second, minimum wage often becomes a ceiling rather than a floor.

“The employer will say, ‘I’m paying you this much because I’m required by law to do so, but I’m not going to pay you anything more than that,’” Mr Lim explained.

The third problem is “sticky wages” – minimum wage rates that get revised “maybe every five years during general elections,” leaving workers waiting years for meaningful increases.

Building the four-ladder solution

Instead of a wage floor, Mr Lim envisioned wage ladders – multiple interconnected systems that would lift workers progressively higher.

“The power of PWM is that now you got the four ladders mutually reinforcing each other. We provide the base and at the same time without imposing a cap,” he said.

Unlike minimum wage’s one-size-fits-all approach, PWM creates multiple wage levels within each sector.

“In the cleaning sector, we have not one minimum wage, but five minimum wages. If your skill is higher, your productivity is higher, your job responsibility is higher, you enjoy a higher minimum wage,” said Mr Lim.

These include different rates for indoor cleaners, outdoor cleaners, machine operators, team leaders, and supervisors – each reflecting increasing skill and responsibility levels.

The genius lies in the system’s sustainability.

Tripartite partners set five-year minimum wage targets, giving everyone – unions, workers, employers, and the Government – shared objectives to work toward through coordinated training and job redesign.

Overcoming resistance and fear

When PWM was first introduced to the security sector, in 2014, many workers worried about the skills certification requirements. Union leaders estimated 20-30 per cent of workers – many no longer young – feared they couldn’t pass the tests.

“So we assured the union leaders, why not encourage or go through this whole process of skill certification? For those who are not able to make it, we will have a second round to help them,” Mr Lim recalled.

The result? More than 90 per cent passed with no difficulty.

“The key thing is that for some of our lower-wage workers, especially the lower rung, sometimes they lack the self-confidence.

“But once you bring them onto the ladder, then they realise that every rung of that skill ladder is actually within reach,” he said.

The horse and the river

Mr Lim’s approach about helping workers reflects his pragmatism: “We can bring a horse to the river, but we cannot make the horse drink from the river.”

But Singapore’s approach goes further: “In Singapore, the Labour Movement and tripartite partners do not bring the horse to the river, we bring the river to the horse. Even so, we still cannot make the horse drink from the river.”

His philosophy: create every possible opportunity and make it accessible, but workers must choose to seize it.

Making it mandatory

The decision to make PWM mandatory in the clean, green, and safe sectors wasn’t taken lightly.

Since these sectors operated on outsourcing models, voluntary adoption would have meant early adopters getting undercut by ‘cheap sourcing’ competitors.

Mr Lim found a crucial ally in then-Environment Minister Vivian Balakrishnan, who became the first minister to amend regulations making PWM adoption mandatory for cleaning contractors.

“I must say that he was so supportive, he was so encouraging,” Mr Lim recalled.

The results speak

More than a decade later, the numbers validate Mr Lim’s vision.

The PWM has expanded across eight sectors, benefiting more than 155,000 lower-wage workers since it was first made mandatory for the cleaning sector in 2014.

“I’m happy to say that with the introduction of PWM, looking back the last five to 10 years, we actually achieved it.

Our bottom 20 per cent low-wage workers, their annual wage increase in terms of percentage is higher than the national average,” he said.

This achievement represents what Mr Lim calls a long-held aspiration of the Labour Movement – ensuring that those who earn the least see the highest percentage wage growth, helping to narrow rather than widen income gaps.

The momentum is accelerating.

Senior Minister of State for Manpower Zaqy Mohamad announced at the 10-year PWM commemorative event that basic wage requirements for general cleaners will increase by 85 per cent over six years, from $1,312 in 2022 to $2,420 in 2028 – much faster than the 31 per cent growth over nine years from 2013 to 2022.

But for Mr Lim, PWM’s impact extends beyond just wages.

“Our aspiration is to make every worker in Singapore a better worker, every job in Singapore a better job, so that every worker can take on every better job, so that every worker can enjoy better wages and live a better life,” he said.

The model has proven so effective that it continues expanding to new sectors, with wage increases scheduled regularly, including the four sectors – cleaning, landscape, waste management, lift & escalator – seeing increases on 1 July 2025.

Beyond individual legacy

When asked about his legacy, Mr Lim deflects personal credit: “The strength of the Labour Movement is not the individual. The strength of the Labour Movement is in the movement … not just about the idea, but more importantly the ability to mobilise the ground, mobilise the union, the workers, the companies, the government.”

Yet his fingerprints are unmistakably on a policy that has proven workers don’t need charity – they need ladders.

The job, he insists, is never done: “To make every worker a better worker is an endless journey. To make every job a better job is an endless journey.”

The enduring philosophy

As Singapore continues expanding PWM to new sectors, Mr Lim’s fundamental belief remains unchanged: “Every worker, especially our lower-wage workers, deserves to earn a better living, take on a better job and be supported to become a better worker.”

In a world of quick fixes and political promises, the PWM stands as proof that sustainable change is possible, one rung at a time.