Let’s Consider: Minimum Wage for Singaporeans?

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Minimum wage has been a point of contention for many. The crux of this idea is to protect low-wage workers and guard exploitation by unscrupulous employers. It sounds like a simple, easy solution to compel all employers to comply with paying a minimum price salary.

In considering it’s feasibility, here’s a snapshot to guide us to what’s happening on the ground:

  • I have encountered at least one individual who claims to be paid $300 a month for a full time cleaner job
  • There exists elderly and transient workers who are paid only several hundred dollars for full time work. Actual numbers are difficult to tally; no one will declare these figures. However, these are usually small companies because any well sized one is under public and union scrutiny.

I’ve also spoken around with people who are both pro and anti minimum wage. Here are some of their thoughts:

  • Many would lose their jobs as employers would start consolidating their manpower, making people work more
  • Manpower becomes a commodity, companies might use the salary floor as a benchmark and are discouraged from paying more for better skills
  • Inflation may rise as companies start transferring costs to the paying public

Malaysia has recently introduced a minimum wage of RM$900 – this will be interesting to study in a later to observe impact. Closer to our economy is Hong Kong: which has had introduced minimum wage (of HK$28 per hour, about S$5) for about a year now.

If you’re interested in a full-article of how Hong Kong has turned out, have a read at this link (http://www.timeout.com.hk/big-smog/features/50262/the-28-minimum-wage-one-year-on.html).

For those of you with much less time, I have condensed the article into point form for your easy reading:

  • Hong Kong established minimum wage in 2011.
  • There has been no increase in unemployment rates (though widely predicted)
  • There has, however, been higher inflation. Since this is out of the ordinary, it is believed to be related to minimum wage
  • Real impact affects the lowest paid industries: competition for workers has increased, because more are attracted to easier work and higher pay – such as security guards. Quote security guard Yu, “Even young people are looking to be a security guard… it is highly competitive in the industry these days”.
  • Because of minimum wage induced inflation, the benefit of increased salaries neutralizes because goods now cost more
  • Manpower has now become a problem. Since wages are now the same, people tend to flock to larger companies where there are more benefits over the wages.
  • Workers now find their workload much heavier because companies now cut the number of workers.

There has to be more than minimum wage…

Rather than a minimum wage, I’d prefer the National Wages Council to keep a more watchful eye on exploitation of workers; transient or otherwise. Currently, another problem at hand is unrealistic salary expectation – if you are employer, chances are you have experienced this (frequently): Many people price their salaries on their age rather than their experiences, skills or abilities.

I sincerely wish that NWC actively promote, take action and consider perhaps setting up whistle-blower channels to alert industry, public and unions about employers who are exploiting manpower.

Minimum Wage, I am inclined to believe, is not necessary. If you weigh the pros and cons, this blanket policy is an easy way out. It is more of a populist tool to win votes rather than a genuine interest in helping others. There are far better ways to protect the interests of a few, rather than a blanket policy that will affect all.

Article 23 of the Declaration of Human Rights states that:

(1) Everyone has the right to work, to free choice of employment, to just and favorable conditions of work and to protection against unemployment.

And this… is what I would support: a flourishing economy, a wide range of jobs, more choices, more opportunities to fulfill ambitions and to keep unemployment rate low. I want to see a society that cultivates more successful, intelligent, thinking Singaporeans who command good salaries.

We are people, we are proud of what we do, we have value.

We are not commodities on sale.

 

 

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About the author

Benjamin Chiang

Benjamin Chiang is an enthusiast of good advertising, deep thinking, labour issues and chocolate. He writes also at www.rangosteen.com and occasionally on Yahoo!

The views expressed are his own.

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1 Comment

  • Hi Ben,

    Thanks for writing this article. I will be interested to find out how Malaysia fares in the minimum wage policy immplementation.

    Singapore’s economic success is based on a few factors such as efficiency, relatively cheap labour, low taxes and low inflation. It is a developed nation with a third world exploitation mentality where the hired help or blue collar jobs are paid relatively low wages compared to their counterparts of developed countries. Fixed living costs in a land scarce and natural resource poor society like ours such as rent, electricity and public transport will continue to rise over time but wages for this social group remains relatively stagnant and doesn’t quite keep pace with the rising cost of living. It is a strange conundrum isn’t it?

    Whilst your suggestion of setting up whistle blowing channels to monitor manpower exploitation sounds great; in reality, I don’t know how effective it will be as there will always be objections or challenges for people to whistle blow for fear of their own livelihoods over their conscience.

    I do advocate that a minimum wage should be implemented for certain blue collar jobs such as cleaners, factory workers etc. most susceptible to exploitation as these workers are generally not as well informed or educated, elderly people and thus the most vulnerable in society. Implementing minimum wages will help protect to their livelihoods, keep pace with rising living costs and to avoid exploitation by employers. If people want services, they MUST be willing to pay for it & naturally, the costs will be passed on to consumers. Or else, the chasm between the rich and poor in Singapore will widen further with time and there is no ” justice & equality” and real “progress” for our nation (as the Singapore pledge would have us believe), let alone “happiness” . Yes Singapore will continue to enjoy prosperity but at the expense of the poor who forms the backbone of our work force. And Singapore will be no different to its Southeast Asian counterparts like Indonesia & the Philippines who operate on an exploitative culture that allows the rich to get richer and the poor, ahem barely trying to keep their head above the water…

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