It was reported in the papers today that:MPs debated the minimum wage for 5 hours yesterday in parliament.
"Almost all who spoke on the topic argued that it would do more harm than good; by diminishing the economy's competitiveness, they said, the measure would lead to unemployment for the very workers it intended to help" - ST 13 Jan 2011[Link]
Lets put things in perspective. This is the same parliament that debated and supported the idea that our political leaders should be paid the highest salaries in the world. Yesterday, the same parliament got together to run down the idea of minimum wages - paying workers a decent wage for their work.
The economic tradeoffs of implementing minimum wages are actually not so large provided certain pre-requisites are in place. These include having a not so large income gap, low cost of living and an economy that is not so dependent on cheap labor. When you have these in place, setting a minimum wage is just a formal step to put in place legislation to ensure a small number at the margin are not exploited and once minimum wage legislation is in place it serves as a back stop to prevent govt from taking easy solutions such as depressing wages to attract industries dependent on low wages just to keep employment down and a minimum wage will motivate businesses to invest and improve productivity. Minimum wage will also motivate govts to keep other business costs such as rent, utilities and transport low so that businesses can remain competitive.
"None of the MPs who spoke advocated that Singapore should implement a minimum wage now" - ST 13 Jan 2011[Link]
You don't have to take 5 hours to debate why Singapore should not it implement now. We cannot and the reason we cannot do it is because the PAP govt over the years destroyed all of the pre-requisites needed to implement minimum wages. Singapore has a very high cost of living - thanks to the HDB and various GLCs. Singapore has a very large income gap - thanks to the govt's policy to import cheap labor that depressed the wages of a large segment of the population. Singapore is dependent on cheap labor - productivity growth has been neglected because businesses have access to cheap foreign labor. Singapore's productivity growth fell to just 1% in the past decade - the lowest of all developed countries. Because these pre-requisites are missing Singapore cannot implement minimum wages as non-disruptively as some countries can.
The PAP govt believes it deserves the highest salary in the world. I believe that workers should be paid decent wages. What is so good about an economic system in whch workers work full time jobs but cannot make enough for decent living?
"......suggestions piled up on how to improve the Workfare Income Supplement (WIS) scheme, a regular payout given to encourage low-wage workers to stay employed.
As Mrs Teo declared: 'I think it's fair to say that most members agree that Workfare is a better alternative." - ST 13 Jan 2011[Link]
Lets not forget in the ancient times slaves also have jobs and they also had food and lodging. Workfare locks a large segment of the populace in low paying jobs...menial jobs that they have to take up in order to receive workfare. As a temporary measure, it keeps their head above water as the cost of living rises - even that, the PAP can't do properly insisting that a large part of Workfare go to CPF and the average Workfare receipent gets only $80 a month. But surely our economic goals cannot be to keep a large segment of the population just above subsistence level? This is a govt that once dreamt of delivering the Swiss standard of living to Singaporeans ....and now it is saying that giving out Workfare to keep people just above subsistence is the best it can do. It just goes to show how far down the path we have gone. If you buy the PAP system and its solutions, we will go further down the same path....and that is the plan the PAP has for you and your children. With Hong Kong implementing minimum wages last week, Singapore is the only developed country without minimum wages and govt without the desire to put in place a minimum wage. ...this says a lot about the leaders and the system they have put in place.