More work-study diplomas, ‘higher quality’ vocational instruction to tackle starting pay gap between tertiary graduates

The median starting salary for a university graduate is almost twice that of an Institute of Technical Education (ITE) graduate currently.

Earning gaps between the ITE, polytechnic and university graduates also increases over their lifetimes, and this divergence is worrying, said Deputy Prime Minister and Minister of Finance Lawrence Wong on Tuesday (Oct 18). 

To combat this issue, the government will use a two-pronged approach to ensure Singapore’s economic growth in light of a “more uncertain and volatile global economic environment”. 

One of these approaches is to increase the number of work-study diplomas across sectors and invest more in Institutes of Higher Learning, in an effort to bridge the starting pay gap between tertiary students.

The Government will also invest more to raise the quality of vocational instruction in Institutes of Higher Learning. The ITE skills-based curriculum will be “levelled up” to give students deeper industry-relevant skills.

Speaking at the Singapore Economic Forum held at The Regent, Deputy Prime Minister Lawrence Wong also emphasised the need to strengthen the multiple pathways of progression in society. 

Mr Wong pointed out how the current economy still places too much of a premium on cognitive abilities – deemed as “head” work – and does not accord the same value to other forms of technical work, including service and community roles – deemed as “heart” or “hands-on” work. 

He added how change – such as the phasing out of streaming in secondary schools – cannot just stop at the education system.

He also cited efforts that are already in place, such as the increase of Local Qualifying Salaries over the last decade.

The Government plans to expand the Progressive Wage Model (PWM) to more sectors and occupations, he added. Mr Wong explained that the PWM had resulted in real wage growth for lower-wage workers over the past decade.

The other prong, which aims to “equip, empower, and assure” Singaporeans, will see upgrades to the SkillsFuture programmes for workers to better upskill themselves.

Areas of consideration include the incomes of workers with families as they pursue training full-time, and leave and time-off policies for employees so that they can focus on upgrading themselves.

Mr Wong said that the Government “will do our part by investing in our people, and reducing the material gaps in wages and incomes between these different types of work”.  But this means that Singaporeans must “be willing to pay more” too. 

“Businesses must do their part too, by recognising the value of different types of work, re-design their business processes and jobs, and pay their workers well. The Government will support you in this endeavour, as we have been doing for example through the Progressive Wage Credits Scheme,” he said. 

“So even as we roll out progressive wages, the Government is helping to co-share the wage increases. All of us as Singaporeans must do our part, and be willing to pay more and bear the higher cost of goods and services delivered by our fellow workers in these different sectors and occupations.” 

Mr Wong added in his speech by pointing out the same threads that have come up in his Forward SG dialogues so far, where one described Singapore as “a place which values the contributions of all Singaporeans, regardless of who they are or what they do”.

The other two threads describe Singapore as a place where: people can aspire to exciting careers and jobs, and everyone is assured that they will always be supported to realise their potential and succeed especially if they fall on hard times. 

“Some of these shifts will not be easy to attain. But if we work together, I am confident that we can expand the possibilities for fulfilment and success for every generation of Singaporean,” said Mr Wong.

For more content about Forward SG and how youths can participate, click here.