Helping low-wage workers help themselves through training are (from left) the WDA’s Jennifer Tan, CPF Board’s Maple Chang, and MOM’s Jane Lim and Hoe Yeen Teck. — ST PHOTO: DESMOND WEE
TWO years ago, an experiment to turn the despair of low-wage workers into dreams of a better life began to unfold.
The candidates were shortlisted from people who visited the community development councils for a variety of assistance. Many were found to be in low-paying jobs or having irregular work.
Career counsellors sought to change their lives.
How? Nothing revolutionary, except to go for training – an answer that has long been touted as the solution to prevent the working poor from staying at the bottom of the heap.
But not all were convinced.
Some were illiterate and fearful that they could not understand the courses. Some were doubtful if they could absorb anything after leaving school for so long.
Others simply had no time, as they were busy pulling double shifts or taking on two jobs to make ends meet.
Such obstacles did not deter Ms Jennifer Tan, director of the policy and employment facilitation divisions at the Workforce Development Agency (WDA), which conducted the experiment.
It all boiled down to persistence and innovation to deal with issues that should be tackled sooner rather than later.
‘As public officers, we should always be continuously adjusting policies. We should have the sense of urgency… If you know the problem now, try to solve it now,’ she tells Insight of her lessons learnt from dealing with such issues.
This gung-ho attitude stems from the desire to help low-wage workers ‘graduate’ from the Workfare Income Supplement (WIS) scheme.
Moving up the ladder
THE WIS scheme was launched in 2007, a year before the experiment began. It offers low-wage workers permanent financial help – in cash and Central Provident Fund (CPF) payments – to supplement their incomes.
They had to be 35 years and older, and earn a monthly salary of not more than $1,500. Their jobs need not be regular, but they had to work for at least six months in a year.
Workfare is not welfare, as the benefits are given to the employed rather than the unemployed to encourage people to work, but it was still considered a radical move.
For a Government which had eschewed giving permanent aid to the needy, the policy was, for the first time, a recognition that low-income earners needed some form of help to get by as they were languishing in this globalised world.
Figures from the Household Expenditure Survey in 2005 showed that while average income for households rose 1.1 per cent a year, those in the bottom 20 per cent saw their incomes fall 3.2 per cent a year – leading to a growing income gap.
The divide has narrowed slightly after WIS was introduced, based on Gini-coefficent figures which measure the income distribution within a country. If government aid like WIS is taken into account, the gap narrows even more.
The goal, however, was not to be content with just propping up their incomes with government aid, but providing ways to move up the career ladder.
‘The point of WIS is not to close the income gap, but to encourage work,’ points out Ms Jane Lim, deputy director of the manpower planning and policy division at the Ministry of Manpower (MOM).
Persuasion and pep talks
ENTER the experiment to equip the working poor with the right skills for a better paying job.
But to pull it off, there were lots of persuasion and pleading, with pep talks to motivate and make them believe they could do it. Eventually, 300 low-wage workers signed up for training customised to their needs.
A novel idea was mooted – giving them a training allowance. Previously, only jobless people who went for training were eligible for this payout.
The proposal was raised after Ms Tan and officers dealt with cases in which workers were willing to attend courses, but could not afford to give up extra work to go for training.
There were some concerns about whether the allowance could result in people attending courses just for the money instead of being serious about learning.
Such scepticism has been pushed aside. If having a training allowance could help these workers make up for the loss of income and lead to more attending courses, it is the right thing to do, she reasons.
It was set at $4 for each hour that a worker attends training.
But there was careful screening to ensure that the allowance was given to those who really needed it, says Ms Lim.
‘We have to look at the opportunity cost, as some have to give up another job to attend training. But we did not give training allowances freely,’ she stresses.
The experiment ended after a year, with half of the 300 workers completing the necessary courses. Some went on to find higher-paying jobs.
The other half dropped out due to reasons such as family commitments and finding training too difficult.
While the experiment did not yield the desired outcome of having more people complete their courses, it was not an exercise in futility.
This pilot project was subsequently used as a reference to design the new Workfare Training Scheme (WTS) that will be rolled out in July.
The target: Improve the literacy level of 5,000 Workfare recipients to an equivalent of N levels, in three years.
Cash will be given to those who complete certain courses, capped at $400 a year. Those who attend training will also receive an allowance.
Sharpening the incentives
THE new WTS scheme was part of a package of proposals put up in February by the Economic Strategies Committee (ESC), which was tasked to find new ways to grow the economy.
While the committee zoomed in on raising productivity as a key plank to improve economic performance and pay packets, attention was also paid to promoting inclusive growth.
The WTS, along with other changes to the WIS scheme, was thus introduced to alleviate the plight of the poor. The recommendations were accepted by the Government and more details were announced during the annual Budget statement in February.
Apart from fulfilling a social objective, the aim was to build up a base of skilled workers who can meet the manpower needs of employers, adds Ms Lim.
The changes were timely, as they also coincided with the three-year review of the WIS, with updates to the scheme due this year. Preparations for the review, however, started before the ESC was formed in the middle of last year.
In fact, they began soon after WIS became the fourth permanent pillar of Singapore’s social safety net in 2007 – along with CPF, the 3Ms of health care and home ownership.
Over time, 10,000 WIS recipients were polled to provide a clearer picture of the poorest workers to better understand and cater to their needs, says Mr Hoe Yeen Teck, assistant director of MOM’s income security policy department.
It included questions about the barriers to training and what would compel them to carry on working, he adds.
There is also feedback from the public and parliamentarians, which his department trawls through.
‘We concluded that Workfare has been effective, but the question is: Can we encourage more people to work, or to stay on in their jobs and not drop out from the labour force?’ he says.
From the survey data, the answer was obvious: Sharpen the incentives.
‘In the survey, we didn’t get a response that the Workfare amount was not enough,’ he notes.
But if the incentives are increased, he found that more of the jobless will want to work so as to join the scheme and fewer will want to leave the workforce early.
That was the reason for increasing the WIS payout, to as much as $400 more a year. The monthly income ceiling was also raised from $1,500 to $1,700 so that more will benefit.
On the perennial question of excluding overtime pay when deciding if a person is eligible for WIS, Mr Hoe says it was discussed but dismissed eventually.
‘It’s the total income that matters. Overtime pay, at the end of the day, is still income that you can bring back to the family,’ he explains.
As for calls to have more frequent payments and giving more WIS in cash rather than CPF, these suggestions have been shelved for now.
INITIALLY, and even now, there were a lot of questions about what WIS offers. Many also did not know what to do with the CPF portion of WIS they receive.
‘Making sure that Workfare was effective was really about the implementation,’ says Mr Hoe.
So for him, and his colleagues, it involved spending after-office hours and weekends at roadshows in the HDB heartland or going door to door to sell the idea of Workfare to the poor.
They still do it to this day.
In particular, they want to reach out to informal and self-employed workers who may not be part of the CPF system and hence do not automatically receive WIS. These workers first have to contribute to their Medisave accounts, before qualifying for WIS.
Ms Maple Chang, senior manager at CPF Board’s self-employed scheme and Workfare department, recalls the humbling experience of knocking on doors with grassroots leaders.
Some workers are not aware of WIS, but refuse government help as they prefer to stand on their own feet. Some know about the scheme, but fear contributing to Medisave as it could get their bosses into trouble for not paying them CPF.
Then, there are the angry residents.
‘They say, ‘I can’t even feed myself and you expect me to contribute to Medisave’,’ says Ms Chang.
Though some doors are slammed shut, she soldiers on. ‘Even if one person benefits, you derive meaning in your job.’
Through such efforts, 76,000 workers have joined the CPF scheme in the last three years. Among them, 14,000 qualify for WIS, which is paid to more than 300,000 workers each year.
But new ways to market the policy have also been learnt.
‘We soften the approach by giving them freebies, such as umbrellas and reusable shopping bags,’ she says of the continuous outreach efforts.
‘There is no better feeling than the instant gratification of free gifts.’
Help, not handouts
THE gratification goes both ways.
For Ms Lim, who was involved in the implementation of Workfare from the early days, the satisfaction derived from seeing the improving lives of low-wage workers is immeasurable. ‘It is not just a policy issue, but also important for the social compact,’ she says.
But what struck her while dealing with issues relating to low-wage workers is the resilience among Singaporeans.
‘In focus group discussions with low-wage workers in 2005 and 2006, there was a sense that people didn’t want handouts from the Government.
‘They wanted to take care of themselves, as there was dignity in doing so,’ she notes.
The message of WIS is thus turned into one which has an impact on families, as workers are more receptive of government aid if they believe it will help their children benefit from a better life.
‘We should be very clear that we are trying to help them, and not give handouts,’ she says.