adapted from TOC:
Kirsten Han -
Upon reading the ChannelNewsAsia article ‘S’pore should not set a minimum wage for low-income workers: Lim Boon Heng‘ on 16th September, I wrote the following tweet:
It wasn’t meant to be much but it got re-tweeted by a whole bunch of people, so I guess it struck a chord somehow. But now I would like to go through the article again and look at Mr Lim’s argument against the minimum wage.
Mr Lim believes that this could push up the price tag on Singaporean workers, and in turn make it harder for them to find jobs.
Image from The Straits Times
As the government has pointed out, there is actually no shortage of jobs in Singapore. However, what they have constantly overlooked is the fact that many of these jobs pay so little that Singaporeans are simply unable to accept them. The government then brands such Singaporeans as “choosy” and begins to import migrant workers by the truckload to fill these jobs. It all feeds into a vicious cycle: the foreign workers are able to work at a wage that most Singaporeans with mortgages and loans are unable to, so wages get depressed, Singaporeans are unable to take on those jobs, and more foreign workers are imported to work in these low-paying jobs.
Singaporeans are already finding it hard to get employment, because there is no way to compete with the foreigners who are willing to work longer for less.
A minimum wage would not only “push up the price tag” for Singaporeans, it would also “push up the price tag” for the migrant workers. This would have two effects: it would ensure that migrant workers are no longer exploited, working long hours for pittance. It would also level the playing field between Singaporean workers and migrant workers. Although it wouldn’t be able to automatically bring about a system of complete meritocracy, it would at least help make it less about undercutting each other in terms of wages.
And anyway, how would the minimum wage make it difficult for Singaporeans to find work? If there were legislation for a minimum wage, it would mean that all employers in Singapore would have to pay the minimum wage, unless they all want to leave the country. So the claim that Singaporeans would not be able to find work in Singapore if there was a minimum wage is simply ludicrous. Unless every single employer in Singapore decided to move to another country, they would HAVE to hire Singaporeans at this minimum wage.
But perhaps that is what Mr Lim means. Perhaps he is referring to the huge MNCs that would simply pack up and move away if they felt that Singaporeans were no longer cheap enough labour. However, is that really a good enough reason to not have the minimum wage? The truth of the situation is that we in Singapore will never be able to compete with countries like India, Bangladesh and China when it comes to cheap labour. Sooner or later the MNCs in search of cutting costs will move no matter what we do.
Shouldn’t our strategy not be about looking out for our own Singaporeans and dealing with suppressed wages instead of rushing to placate MNCs?
Instead, the government should step in to top up the pay of low-income workers, something that has already been done through the Workfare Income Supplement (WIS).
Mr Lim said: “So we started the WIS system a couple of years ago. I think with this system, we should improve…I believe the minimum wage meets the needs of a bygone era, it does not meet the needs of today’s world.”
The Workfare Income Supplement might have been initiated with good intentions, but it is capped at a maximum of S$2800 a year. You also have to be above 35, living in a property with Annual Value not exceeding $11,000, earning a salary of less than S$1700 a month, etc. etc.
This is simply not good enough as a substitute of the minimum wage. Firstly, it cuts out a large number of Singaporeans who might be earning above S$1700 but are still not well off enough to meet the rising cost of living in Singapore. All you need to do is look at all the cases of the “working homeless” in Singapore. It doesn’t take a rocket scientist to understand that although S$1500 – S$1700 is considered “too high” a monthly income to be deserving of social welfare, it is not enough to make ends meet, especially if you have more dependents and responsibilities.
Here is the list in Wikipedia of minimum wages in countries: List of minimum wages. An awful lot of countries have minimum wage laws. Many who don’t have some sort of union/collective agreements that more or less set minimum wages for their workers. Is Mr Lim suggesting that all these countries are being run by fools who don’t know what “the needs of today’s world” are? Perhaps he would like to educate us all: what are the needs of today’s world, and how is the minimum wage inappropriate?
