Having a union chief that believes minimum wage has no place in Singapore says a lot about what kind of system we have in Singapore. Minimum wage policy wherever it is implemented, whether in Europe long time ago or Hong Kong more recently, has always generated plenty of debate. However, you will never find a labor union chief in any other country that will speak out against paying workers a minimum decent living wage. Lim Swee Say speaking against minimum wage just shows us how lopsided and unbalanced the system is ....even more so than the absence of a minimum wage itself. Lim Swee Say, as labor chief, also urge workers to be "cheaper, better, faster" at a time when Singapore has the highest income inequality among developed countries.
Lets get it clear, the debate on minimum wage in Singapore gained momentum because income gap has widened so much in the past decade and an significant underclass consisting of the bottom 20-30% of resident workforce has emerged. If the PAP govt had not pursued policies that caused the income gap to widen such as allowing the influx of cheap imported labor, regressive taxation policies and erosion of labor rights and benefits, the reasons for having minimum wage would be less compelling.
Lim Swee Say recycles old arguments against minimum wage. He says it will erode competitiveness by raising business costs and cause unemployment. Labor is only one component of costs - rent, utilities, govt charges etc. You never hear Lim Swee Say urging landlords to keep rentals low or reducing CEO pay or suggesting that electricity tariffs which is 2nd highest in the world should be reduced to keep Singapore competitive - he believes in making workers "cheaper" to stay competitive as part of his CBF (Cheaper, better faster) strategy. Higher wages will actually provide businesses with incentives to automate and increase productivity which has been falling forthe past few years. Minimum wage only causes unemployment in economies that are highly dependent on cheap labor. We should restructure our economy and move away these industries otherwise we will have workers locked in a 3rd world wage structure coping with a 1st world world cost of living.
If we believe a person working full time in Singapore should be paid decent wages , we have to make it happen with leadership that is determined to put in place the economic pre-conditions that make it possible. All developed countries other than Singapore have done it. Hong Kong has gone ahead and Malaysia is likely to implement it by next year. We, in Singapore, have a "cannot do" leadership that seeks to maintain the status quo because it best preserve its own interests and the interests of the large network of businesses to which it is linked. In such a system, inequalities can only expand....
Minimum wage policy won't work: Employers, labour chief
By Kor Kian Beng
SINGAPORE'S labour chief and employers have come out strongly against the idea of a minimum wage and debunked recent claims it would be effective in helping the country's low-wage workers.
National Trades Union Congress (NTUC) secretary-general Lim Swee Say and the Singapore National Employers Federation (SNEF) marshalled arguments to show that a minimum wage is hard to implement effectively and failure to do so would trigger negative effects on workers and bosses alike.
The nasty consequences include raising business costs, driving up joblessness, pushing up costs of living and eroding Singapore's competitive edge, while doing little to lessen income inequality.
Mr Lim, who leads 60 affiliated unions with more than 530,000 members, made it clear in an interview with The Straits Times last week that a minimum wage has no place in Singapore - now or in the near future, because 'it will not work'.
He said there was no way to get it right: If the wage was set too low, it would serve no purpose as low-wage workers would continue to earn little. If set too high, it would trigger higher unemployment as companies would cut demand for labour or their investments.
Based on Singapore's workforce of two million, every one percentage point increase in the unemployment rate would mean 20,000 low-wage workers losing their jobs, cautioned Mr Lim, who is also Minister in the Prime Minister's Office.
He dismissed as well the idea of setting different minimum wages for each sector, depending on the type of work done by low-wage workers, as it would be hard to justify why workers in a certain sector should be paid a higher wage.
In response to media queries, the SNEF said a minimum wage would raise costs and force bosses to respond in ways 'none of which are beneficial'.
These include cutting headcount and trimming workers' benefits and training. Ultimately, a minimum wage would eat away at the competitiveness of the Singapore workforce, said the SNEF, which has 2,000 members employing more than 600,000 workers in total. It said: 'Jobs will be lost and fewer new jobs will be created as new businesses find the minimum wage an impediment and choose to start up elsewhere.' SNEF also cited research findings that showed a causal link between a minimum wage and negative effects on employment in countries like the United States. The robust response from the labour movement and the employers follows a debate on minimum wage last month. It began with opinion pieces by National University of Singapore economists Lim Chin and Hui Weng Tat - the former opposing, and the latter supporting the idea. This was shortly after Hong Kong, an economy often compared to Singapore, legislated a minimum wage in July, paving the way for its implementation by next year. A minimum wage sets a salary floor employers cannot breach. Its key aims are two-fold: Protect low-wage workers from potential exploitation and help them earn higher wages to cope with rising costs of living. In the latest debate, the idea of a minimum wage appeared to gain more support because of a widening income gap here. Official figures showed top managers earned four times more than cleaners and labourers at the bottom in 1998. It grew to 5.12 times in 2008. Lending support this time were Ambassador-at-Large Tommy Koh and Mr K. Kesavapany, director of the Institute of Southeast Asian Studies. Disagreeing, Mr Lim and SNEF believe the better way to help low-wage workers is to raise their skills through what Mr Lim calls a 'minimum skills' approach. Developed since the mid-1990s, this includes a training infrastructure with 46 centres islandwide, and a nationally recognised skills certification system. Over time, higher skills and productivity would lead to higher wages, instead of compelling employers to cough up the extra money through a minimum wage law, said Mr Lim. 'We believe the most effective wage ladder for low-wage workers is the skills ladder,' he said. Responding to Straits Times queries, the International Labour Organisation said a carefully articulated set of wide-ranging policies is needed to secure 'minimum income' for low-wage workers. It believes this holistic approach is 'at least implicitly reflected' in Singapore's recent policy measures. But this does not mean there is no need for a minimum wage here because it can help prevent abusive wage practices, it added.