Despite having a legislature which is composed mainly by members not elected but selected by Beijing and dominated by business elites, they have passed their first minimum wage law. The minimum wage is set at S$5.84 per hour.
In a posting about a year ago[Link], I explained why the PAP govt refuses to implement minimum wage laws. The 3rd world wage structure in Singapore has resulted in enormous disparities:
Lowest paid jobs in Singapore*
1. Office cleaner $600
2. Manufacturing labourer and related worker $760
3. Kitchen assistant $991
4. Plastic product machine operator $994
5. Hospital attendant $1,000
6. Travel agency and related clerk $1,016
7. Waiter $1,080
8. Pre-primary education teachers $1,100
9. Lorry attendant $1,102
10. Pest exterminator $1,106
* Based on median starting salary ...data from The New Paper
If a meaningful minimum wage is set, the economy which is dependent on low wages (Cheaper, Better, Faster) will be affected. Countries that have a 1st world wage structure have no problems implementing minimum wages and in fact, they all have it to raise the living standards of a small segment of the population at the margin. For me, the issue is not whether we have minimum wages or not but years of unbalanced policy making, lack of independent unions and dependence on cheap foreign labor has made it difficult to implement minimum wages. We have a large segment of our population now locked in an underclass with little chance of elevating themselves no matter how hard they work.
Hong Kong is not a democracy, it is not even a nation. I think for a long time, many believe that in Hong Kong, it is every man for himself and 'you die your business' ....complete laissez faire....brutal capitalism...where people have 'you sell you soul for money' kind of greed. But today they have comprehensive welfare, minimum wages, and a populace yearning for democracy and justice and are willing to take to the streets for it. The minimum wage legislation saw huge opposition from big businesses who threatened to layoff workers but the fact is only their profits will be hurt. The minimum wage set at S$5.84 per hour is not high but the victory shows that it is possible in Hong Kong to win against the big businesses there to bring about greater social equity - something we cannot see in Singapore. They will be able to do more when they become more democratic in a few years.
If Hong Kong can pass a minimum wage law, where does that leave Singapore? Think hard about what kind of political system we have here. How the PAP has become intertwined with a network of businesses to which it is linked and how the establishment has other interests and priorities other than that of ordinary Singaporeans. There is no interest to bring about balance in policy making - the PM can tell us 6 months ago that they are serious about moderating the foreign influx only to take it back last week by saying 100,000 more are needed. Be it floods, crowded trains, insufficient public housing, income gap, ...when the problem affects ordinary Singaporeans and not PAP's interests, there is little will in govt to get it fixed.
Hong Kong Passes Minimum Wage Law
Sat, Jul 17, 2010
HONG KONG - Hong Kong on Saturday passed its first minimum wage law, a controversial issue that has divided the city's business sector and labour groups for more than a decade.
Lawmakers hailed the passage of the bill - secured after more than 40 hours of heated debate - as a historic moment for Hong Kong, where policymaking is often heavily influenced by the powerful business elite.
Officials said the law will take effect next year, and a government-appointed task group is expected to propose a minimum wage level in the coming months.
But pro-democracy legislators, whose numerous attempts to have the bill amended were blocked by their pro-government counterparts, said there were many loopholes in the new law.
Lee Cheuk-yan, lawmaker and a leader of Hong Kong Federation of Trade Unions, said: "No doubt it is a historic moment for Hong Kong."
"We have now said goodbye to an unfair practice in a capitalist economy and acknowledged the fact that workers should be rewarded for their hard work," he told AFP.
Recent surveys showed that many workers at large retail chains are only paid between two and three US dollars an hour.
Lee said it was "regretful" that the legal framework for setting the minimum wage will be largely controlled by the government.
Under the law, all members of the task group will be picked by the city's chief executive. The legislature can only approve or reject the wage level proposed by the group, but cannot make any amendment.
The law will require the task group to review the wage level once every two years, instead of once a year as proposed by trade unions.
"We will have to use public pressure to campaign for a fair minimum wage level, since under the legal framework the control will be largely in the hands of the government," Lee said.
Unions have pushed for the minimum wage to be fixed at 33 Hong Kong dollars (S$5.84) an hour, saying anything less would not cover basic expenses with living costs having risen sharply in recent months.
Many countries already have minimum wage legislation in place, with the hourly rates in New York and London set between 7.25 and 8.80 US dollars.
Hong Kong's minimum-wage proposal had faced stiff opposition from some of its largest employers, with some threatening large-scale layoffs if the change was introduced.
Michael Chan, chairman of fast-food giant Cafe de Coral - who was ranked by Forbes magazine as the 35th richest man in Hong Kong in 2009 - has said his company might issue a profit warning if the hourly rate proposed by the unions became law.