AVERAGE EARNINGS OF FEMALES AND WAGE GAP BETWEEN MEN AND WOMEN

Dr Lily Neo asked the Minister for Manpower (a) what are the average monthly earnings of resident females from 1997 - 2001; and (b) whether the wage gap between men and women is getting narrower.

The Minister for Manpower (Dr Lee Boon Yang): Mr Speaker, Sir, based on the Central Provident Fund Board's records, the average monthly earnings of females increased from $2,256 in 1998 to $2,588 in 2001, or at a rate of 4.7% per annum during the period. After discounting for inflation, the real earnings rose from $2,263 to $2,535 at an annualised rate of 3.9% during the same period. Earnings data prior to 1998 are not comparable due to a change in the collection methodology. The hon. Member asked for data from 1997. Because of the change in collection methodology, I gave the figures for 1998 onwards.

Sir, females in Singapore generally earn less than males at the aggregate level. This is not unlike the experience in many other countries. In 2001, the average monthly earnings of females was 72% that of males. This reflects the higher concentration of females in lower paying occupations due to the poorer educational attainment of the older cohorts of female workers. The tendency for females to withdraw from the workforce because of childcare and household responsibilities also reduced the average years of service and experience of working females. With our seniority-based wage system, females, as a group, will therefore earn less than males. For the younger age group, the wage gap differential is generally smaller. In fact, in the age group of 25 to 29, women working as managers, professionals, associate professionals and technicians, and service and sales workers actually earn more than their male counterparts. Other factors contributing to the gender wage disparity include differences in skills, qualifications, age, job nature and position.

The wage gap was largely unchanged over the last few years. It was also 72% in 1998.

Sir, the underlying concern in Dr Neo's question on wage gap is whether women in Singapore are discriminated against in employment. Average monthly earnings of women have significantly increased over the years. While differences in wages still exist, I would like to emphasise that it is not the result of discrimination at work. Rather, it is due to legitimate work-related reasons such as working experience, years of service, types of jobs held and skills, as I mentioned earlier.

The Government's policy on employment is based on the principles of equal opportunities and meritocracy. Our employment practice emphasises equal opportunities for all, and a reward system based on performance. The Singapore Civil Service adopted the principle of equal pay for equal work since 1962. NTUC and its affiliated unions make no distinction between male or female members. In collective agreements signed between unions and employers, the principle of equal pay for work of equal value is the norm. In addition, the National Wages Council, which is the national tripartite advisory body on wages, formulates wage increase guidelines each year based on key economic indicators, such as GDP growth, productivity, inflation and international competitiveness. This has enabled Singapore workers, both men and women, to enjoy a fair share of the fruits of economic growth.

Dr Lily Neo: Sir, may I ask the Minister whether he is satisfied with the rate of the narrowing of the wage gap in the past five years? What has his Ministry done to narrow this gap? And what else can be done to further accelerate the narrowing of this wage gap?

Dr Lee Boon Yang: Mr Speaker, Sir, we cannot say that we are completely satisfied with the situation. We will want to work towards a point in future that the skills and qualifications of the women workers are equal to that of men, so that they will be able to earn the same pay. On a national basis, looking in total, this will take time, because we still have many cohorts of older women. And if we look at the education of the older women, they tend to lag behind that of their male counterparts in the same age cohort. The way to narrow this gap is, in fact, through education. As I mentioned earlier on in my main reply, in the age group of 25 to 29, the women actually earn more than the men. And through better education, we will find the women entering the labour force will have as good an education, and as good a training as their male counterparts, and they will earn the same wages as their male counterparts. So, with education, we will gradually narrow the gap.

What has the Ministry done? In terms of continuing education and training, my Ministry also makes no distinction between male and female workers. We give equal encouragement and support to women who come forward to undergo skills retraining or upgrading. In fact, we have many programmes which help the lower skilled workers, and you will find a disproportionate number of women among the lower skilled. They are the ones who stand to best benefit from this programme for skills upgrading. And we will continue to implement programmes to help the lower skilled to uplift their skills for the new jobs in the new economy. This is the way for us to speed up the narrowing of the wage gap.

What else can be done? As I said, we will continue to look at more skills upgrading programmes for the cohorts of women who are already in the workforce, particularly the older women in their 40s and above. They have poorer education and lower level of skills. The way for them to narrow the wage gap is, in fact, to go for skills upgrading, and take advantage of the many programmes that we have, whether it is the National Skills Recognition System, the Skills Redevelopment Programme or one of our strategic manpower conversion programmes that will help them to acquire new skills for jobs in different areas. If they take these opportunities to upgrade themselves, I am sure they will be able to earn a higher wage.

Dr Lily Neo: Sir, may I ask the Minister for the outcome of the study which he agreed to look into when I raised the issue of the wage gap in 1997 on the challenges faced by women in employment, such as the general opinion of the employers with regard to the role of women in the workplace, and also the difficulty of balancing work with family responsibilities?

Dr Lee Boon Yang: Mr Speaker, Sir, since 1997, or earlier than that, my Ministry has been actively promoting family-friendly human resource management practices. We have given awards to recognise firms with practices which are actually family-friendly, particularly for their women workers. We will continue to do so. We will continue to explore how we can encourage companies and employers to adopt family-friendly practices for their female workers in order to allow them to better balance their career and also the needs of the mothers and wives to manage the home. These are issues which are constantly being looked at.

With regard to the specific study that the hon. Member said that she raised in 1997, I have to look it up, because I do not have the answer with me right now.

Mdm Ho Geok Choo: Sir, one of the reasons cited for the wage gap of females compared to their counterparts is that they have withdrawn from the workforce to mind their children. I would like to ask the Minister whether there is a possibility for a scheme to be examined which is similar to the National Service scheme for NSmen to make up for the loss of their 21/2 years' national service training. Normally, they are given increments. For women who withdraw from the workforce to do their "national service" in looking after their children, if they should re-enter the workforce, is there a chance for them to be given some kind of recognition for the "national service" that they have performed, so that we minimise the wage gap between male and female workers?

Dr Lee Boon Yang: Mr Speaker, Sir, I think there is a tendency to try to draw parallels all over the place, and we can arrive at very unusual conclusions. The reason why Government gives increments to NSmen within the civil service and encourages the private sector to give the males who have to perform 21/2 years of national service the same recognition is self-evident. Because they have to give up 21/2 years of their career to perform national service at a very nominal allowance from the Ministry of Defence. So, we try to make up for them by encouraging employers in the private sector and in the civil service to give them two increments when they join the service.

As for women taking time off to mind their families and look after the children, I think there are many other ways people can balance work and home. To have a rigid structure whereby you say that the employer will have to pay the woman worker X number of credits by way of increments upon rejoining the company after a certain number of years, I think this would increase the rigidity in our labour market. The more rigid we make our labour market, the more difficult it is for us to achieve the kind of growth and competitiveness that we want. The world is not getting any more friendlier in terms of economic competition. On the contrary, competition is heating up. The more we introduce these little tweaks here and there, the more difficult we will make it for the women to get work in the future. So, far from helping women, such rigidity may discriminate against women.

I would therefore urge Members to be careful when advancing ideas about how we want to help the women. The way to help them is actually through education and skills training. If we equip them well, they will be needed by the employers when the economy turns around and picks up. They will command a wage that the market will decide and the employers will pay. If we try to include all these little ideas of how to favour them, we will discourage employers from employing more women. So, let us be very careful about what we want to do. Are we here to help the women workers to bridge the gap, or are we going to make life more difficult for them? I would urge you to be very circumspect in proposing such measures. On the part of the Government, we will continue to try to help and equip our women workforce, which is half of the population. If we do not give them every means to upgrade themselves so that they can perform well in the new economy, then we are doing ourselves a serious disservice.

Let me assure all hon. Members that Government will pay particular attention to the needs of the women workers, to help them bridge this gap.

Dr Jennifer Lee (Nominated Member): Sir, I think definitely making things structurally rigid is not good. But I would like to ask the Minister what his Ministry and, in fact, all the other Ministries that he might be able to influence, are doing, in terms of actually changing mindset, and this is where Government can take the lead, because promoting responsibility of the father and husband is a very important thing. I think the recent changes in child sick leave is a good example. But will his Ministry pursue and encourage right across civil service more of this type of benefits? In fact, the approach and the mindset of Government should be to encourage better sharing of responsibilities, because ultimately that is, in fact, the way to go.

Secondly, the Minister has focused very much on the schemes to educate and retrain to close the gap. But he also mentioned in the beginning of his answer that part of it is that women are in jobs that pay less. My question is: are we doing a review of why this is so? Because, I think, society places values on jobs, and we are very prone to just paying for the jobs that bring direct economic benefit and we do not give enough weight to the jobs that enable the economic activity to be carried out in terms of, for example, child care-type or teaching-type jobs. Well, teaching in Singapore has been pretty much taken care of. But there is a value put on the jobs, and it so happens that those ---

Mr Speaker: Dr Lee, put your question. No speeches, please.

Dr Jennifer Lee: Sorry. Will the Ministry review the way jobs are structured and valued to see if we can move this in the right direction?

Dr Lee Boon Yang: Mr Speaker, Sir, with regard to the Nominated Member's first point, yes, I agree with her. We should continue to work, we should continue to chisel away at some mindset about how to help women better cope with work and family. I mentioned earlier on things that give recognition to companies that adopt family-friendly practices. I think this would help. But it is not going to result in an overnight transformation. The civil service will also incorporate some of these ideas about family-friendly practices, and gradually more can be adopted where it is possible. I think this is being looked at. Various Ministries, including the PSD, would be looking at how they can make work in the civil service more family-friendly.

With regard to the other point about some jobs commanding a lower salary and whether the Ministry will look at how these jobs are rated, we know, of course, that we do not have wage controls, and we do not have minimal wages in Singapore for very good reason, ie, to allow the marketplace to operate freely. I think it would be quite difficult, and I do not think it is desirable for us to go around setting wages for child care givers or teachers, or for other vocations. We have to accept that wages are best set by the market to ensure that there is appropriate reward for the effort contributed. If, in fact, there is a serious shortage of child care givers in our child care centres, for instance, then the market will respond. The people who operate child care centres will have to bid higher for the workers that they need, and for the quality of the workers that they need, they will have to pay more. So, I think, we must let the market forces operate. It is either we believe in it or we do not. Then, we have to go in and start setting wages for every sector, every vocation.

For instance, let me cite an interesting point, which is that occupational groups show the wage gap between male and female. For instance, within an occupational group, there may be a wage difference between male and female. But the occupational groups are fairly large. So you have, for instance, a group called plant and machine operators within an occupational classification of our labour force. You will find that males tend to earn a lot more than females in this occupational group. Is it because they are discriminated against? Or is it because the work they do is being under-valued? The answer is no. The answer is that, interestingly enough, in this particular occupational group, females tend to concentrate in occupations such as electronic component assembly. They work in an electronics factory as assembly production workers which generally pays less than the other group of plant and machinery operators, which include bus drivers, for instance. There are not that many female bus drivers, and bus drivers are paid quite well compared to these assembly line workers in an electronics factory. So, as a result, you will find that within this occupational group, there is this difference in wage gap. So should we then go in and tell employers that, no, within this occupational group, you have a big wage gap, you have to do something to fix that wage gap, and you have to address the fact that the women are earning less? But, in fact, within every occupational group, you find this distortion. So, it is not easy for us to go in nor is it desirable for us to artificially go and try to bridge this gap. As I said, the only way to bridge the gap is to equip the women with the skills to do the higher value-added jobs.

Dr Lily Neo: Mr Speaker, Sir, the Minister said earlier that he did not have the outcome of the study of the wage gap. But, am I not asking the question on wage gap today? Therefore, am I supposed to file another Question for Oral Answer to get the results? I am disappointed because I feel that the Minister could have better prepared for this Question for Oral Answer. May I ask the Minister on his point that he was trying to close the skills gaps between the men and women. But, am I not correct to say that according to the study done by his Ministry, in fact, the skills and the educational profile of the female labour force closely match that of their male counterparts?

So, my next question is: Could he give the House an explanation why is it that female workers form the majority of the lowest gross monthly income, according to the data by the Ministry of Manpower, as at June 1999?

My next question is, despite all these facts, why is it that women are still very much under-represented in the administrative and managerial positions?

Dr Lee Boon Yang: Mr Speaker, Sir, I think I have prepared myself to answer this question on wage gap. I do not see any reason or justification to say that I have not adequately given the hon. Member an answer on the wage gap. With regard to a previous study, if she has a specific interest in the outcome on whatever other studies that she requested for, we will be prepared to address those points.

I would take her last point about females having the lowest gross monthly income. I think this is taken as a group, as a whole, and I have spent some time to explain why this is so - partly because of our seniority-based wage scale system. If you take any group, you will find within the group, as I mentioned earlier on, the occupational group of plant and machinery operators, a situation where women tend to congregate at a lower wage level, simply because they are actually doing those jobs - electronics factory production workers rather than men doing more higher value-added jobs operating more complicated and sophisticated machinery.

I do not see what other explanation is there to give, apart from what I have already said that the women are having this lower income or earn lower wages for fairly sound reasons. Not that I agree with them, but the reasons are the results of history. 20-30 years ago, not all the women got the same education as their male counterparts in that cohort. It just was not so. Today, the women in their 40s and late 40s generally have a lower level of education and skills than their male counterparts. Therefore, they are not doing exactly the same job; so, they do not get the same pay.

If you ask me why there are fewer women in management and executive positions, this will change. As I said, for the younger cohort, they are already as well educated as their male counterparts. They will be competing for the same jobs. But in our system where there is seniority-based wage scale, those women who do not want to carry on with their career development, who drop out of the workforce well before they make it to the higher level of management structure, will result in the group as a whole again still having a lower pay. Because for everyone who drops out, you find a man has moved ahead of a woman. So, as a result, taking the women as a group, they will be at the lower end of the pyramid, and more men will be moving up to the higher level of the management pyramid. As a result, if you take the group as a whole, men will still be earning more than women. But that is a choice on the part of the women. Do they want to carry on to develop their career to the fullest, go to the highest level in management? This, in our system of meritocracy, is entirely up to the women to choose. It is a matter for them to choose, to decide how far they want to go, how do they balance their home and career. I do not think we should have a system where we guarantee that within our labour force, there should be equal representation, or a guarantee in our management structure that there should be equal representation. The fact is this is how the market operates. If women want to make the effort to excel in their career, the opportunities are there. There is a level playing field. They can compete for the job; they can compete for the position, and they will be paid for their performance. And I think this is a fair system, and it is a system that should be allowed to continue.

Mdm Halimah Yacob (Jurong): Sir, we have just ratified ILO Convention 100 on equal pay for work of equal value. Is this disparity in income not in compliance with the Convention? Secondly, the Convention also requires us to put in place some mechanism for monitoring wages for both males and females. What kind of mechanism will be put in place by MOM, in compliance with this Convention?

Dr Lee Boon Yang: Mr Speaker, Sir, before we ratified Convention 100 on Equal Remuneration, we have already studied our legislative framework. There is nothing in our legislative framework that will disallow us from complying with the requirements of Convention 100. We are already in full compliance. The fact that this wage gap exists does not mean that we are not in compliance. For your information, Mr Speaker, Sir, many other countries that have ratified the same convention also have a similar wage gap, for instance, the United Kingdom, Australia, Sweden, Finland, Netherlands, Germany, Denmark, Japan, Korea, Luxembourg. These are all developed countries. They are also countries with a wage gap. So, having a wage gap per se does not mean that one is not in compliance with Convention 100. They will have to look at the details of the statistics. As I said in the main answer, our practice and implementation of wage policy are fair. It does not discriminate against women. We pay the same wages for the same work that is being done. If ILO were to query why a wage gap arises in Singapore's context, we will be able to explain why this wage gap has arisen, as in the same way that I am trying to explain to this House.

Mrs Fang Ai Lian (Nominated Member): Sir, with so many women speaking, I feel compelled to join the crowd so that all of us can speak. I fully agree with the Minister that the solution to bridge the gap is through education. But you find that, in the future, when women get more educated, it will be a waste if we lose this very valuable resource when family kicks in.

Sir, I wonder whether you can help change the rules. I think it is all very well to say that discrimination is not there. But it is true that, when the family kicks in, the woman takes a back seat and she will lose her skills if she does not actively try to get back into the workforce. So I wonder whether you could help change the mindset and start much more earlier in the day in the education process to tell the women that life is about various stages and to think ahead for the future. We should change women's mindset on how they can get back into the workforce, how to help change processes, helping them to work from home, how to actively change work processes within the workplace so that women can continue to retain a level of skills and to get connected to the workplace so that, when their children are growing, they can get back actively into the workforce.

Dr Lee Boon Yang: Mr Speaker, Sir, yes, we in fact already do some of these works. We have a programme called "Back-to-Work". Back-to-Work is a programme that was designed to help women who have left the workforce to be retrained before re-entering the workforce. And the whole Back-to-Work programme is also geared towards giving moral support and encouragement to women who have left the workforce for some years and now want to re-enter it but because of the change in the working environment, they do not feel adequate or prepared. So the Back-to-Work programme addresses these issues.

Of course, the Back-to-Work programme during this period of high unemployment is a bit difficult to implement because, first, you got to have the jobs. We started the programme in 1996 when the economy was booming, tight labour market and very limited supply of workers. So we introduced this Back-to-Work programme to try to draw the women who had left the workforce back into it. But since then, the economic situation has turned unfavourably. Jobs have been harder to come by. I remember I did inform this House during the Committee of Supply that we are in fact putting this at a lower priority instead. Maybe when the economy turns around, or when we encounter a similar situation where there are more jobs available, then we should refine this Back-to-Work programme to address precisely the issue that the Member has mentioned, ie, how to help women re-enter the workforce after a period of time spent with the family.

Dr Lily Neo: The Minister said earlier that more women are in the electronics factory jobs. May I ask the Minister whether it is correct to say that as many as 34,000 female workers were retrenched during this economic downturn? May I ask the Minister how many of them were redeployed and how many of them received the skills retraining programme? My next question is: am I correct to say that there are as many as 119,000 female workers earning below $400 compared to the total number of about 172,000 of such workers? What kind of help can we give to these workers?

Dr Lee Boon Yang: Mr Speaker, Sir, when I said that there are more women in the factories doing electronics assembly line type of work, I was referring to the occupational grouping of plant and machinery operators. Is your question on how many of the retrenched workers are women?

Dr Lily Neo: In the figure of 34,000.

Dr Lee Boon Yang: What was your question?

Dr Lily Neo: My question was actually - may I just add - since many of them came from the manufacturing jobs that will not come back, how many were redeployed?

Dr Lee Boon Yang: I think the re-employment rate, on the whole, is probably about 60%-odd, that means, about six out of 10 of those who were retrenched were re-employed. Many who were re-employed probably end up taking a lower paying job than what they had before because the employment market is not so favourable now. As to how many of them had undergone specific retraining, I do not have the figures with me. I know that, for a start, our Skills Redevelopment Programme has a lot of women participation in it. Many of the electronics factory workers who were retrenched, or whose jobs were vulnerable to retrenchment, in fact, had undergone skills redevelopment training.

As to the 119,000 women, whom the Member quoted as earning less than $400 a month, she asked what type of jobs they are in. I think most of these are actually part-time workers supplementing the family income. Of course, some of them could be doing the lower-end jobs, in conservancy type of work. But I think you will find quite a number of women doing part-time work, for instance, NTUC FairPrice supermarkets employ a fairly large complement of cashiers who are women doing part-time work because these are the jobs that are conveniently located within the new towns, close to their homes, and many women like to take on these jobs.

Mdm Ho Geok Choo: The Minister has cited the lagging salary between the male and female as one of the reasons for the gap. Has his Ministry found that the lagging salary between the male and female constitutes one of the reasons for our difficulties in luring the better educated women back to work? And if that were so, what is his Ministry doing to address this issue?

Dr Lee Boon Yang: Mr Speaker, Sir, the salary gap, as I said in my main answer, is one of national statistics. You take all the women workers on one side, you average their salary, you take all the male workers on the other side, average their salary, and you get this gap of 72%. But, in fact, if you look at the women with their male counterparts, if they are of equal capability, equal seniority, doing the same jobs in the company, I do not think they are paid any less than their male counterpart. So the point that you mentioned in your question does not arise. You are confusing overall statistics with an individual situation. We have overall statistics which show a gap. But at the individual level, it is a totally level playing field. A woman who has the same years of seniority in the company, who does exactly the same job, will get the same pay as the male worker. I do not think there are companies that practise this kind of discrimination. I know that the NTUC, in their collective agreements, ensures that all their members, regardless of whether they are male or female workers, get exactly the same salary for doing the same work.

Ms Braema Mathiaparanam (Nominated Member): Sir, just going back a little bit to the ILO, under CEDAW (Convention on Elimination of Discrimination Against Women) and our legalistic framework, the Constitution states that everyone is the same, whatever race or religion, and the part about gender is missing, and that is why we have signed the CEDAW with reservation. How then would the Ministry be in compliance with the ILO where this legalistic framework, to a certain extent, in my opinion, is lacking where gender issues and wage differentiation are concerned as a result of that? Could you please explain how the Ministry sees these two documents, the ILO and CEDAW and our legalistic framework?

Dr Lee Boon Yang: Mr Speaker, Sir, before we ratify any international convention, we will quite carefully study the obligations under the convention. We had studied our obligations under Convention 100, regardless of what the Nominated Member mentioned. I would like to assure this House that we will not be in violation of the requirements of Convention 100. We will be able to meet the statutory requirement after ratifying this Convention. As I have explained, the Government does not practise any discrimination in its wage policy. The employment market itself does not practise wage discrimination. Wages are different because they are not doing the same job. That is the basic point. I think ILO will understand why this is so. There is no regulation that explicitly says that women should be paid less than men. In fact, it is the contrary. The principle of the Government has all along been meritocracy. If you are doing the same job, you will be getting the same reward.

Dr Lily Neo rose ---

Mr Speaker: Dr Neo, I think I shall allow only one last question because I do not see us getting anywhere further with this question.

Dr Lily Neo: Thank you, Mr Speaker. May I disagree with the Minister's answer to my earlier question when he said that the reason for women workers earning less than $400 was because quite a number of them were working part-time. Could I quote the Minister the following figures to make my point? The total number of women workers earning less than $400 a month is 129,737, and after deducting the number working part-time, 50,802, and temporary part-time, 12,831, and some working full-time flexi hours, 15,085, the number of women, supposedly working full-time, yet earning less than $400 a month, is in fact 51,019, or 2.5%, of the labour force.

Dr Lee Boon Yang: Mr Speaker, Sir, I take the point. There are women working part-time who are earning below $400. I gave some examples. There are also women, as I mentioned, doing conservancy type of jobs, like cleaning job, that earn less than $400.