Thursday, January 13, 2011

Minimum Wage Debate : 5 hr Confession of PAP's economic sins...

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.


Anonymous said...

the 66.6% voted those pple
66.6% dun need minimum wage

Anonymous said...

One guy in parliament said that HK got a lot of problems after implementing min wage. Is this true?

Government Doctor said...

I am so ashamed to be a Singaporean. My government builds its economy on the backs of slaves. My conscience tells me that we need a new government - one that would treat people fairly and is in touch with the ground.

Lucky Tan said...

anon 11:30,

HK only implemented minimuum wage recently. It is too early to tell. The problem with HK is they too had a big income gap but they are going to bite the bullet and go ahead with minimum wage.

What did happen is many businesses were screaming against it in HK and 'probably' making exaggerated claims that the businesses will fail and so on. But that was during the debate part, now they actually have to cope with it. What I believe will happen is other costs such as rentals will fall over time to keep overall business more or less the same.

The HK govt was very careful setting minimum wage to only $5/hour (?) which some say is insufficient.

Anonymous said...

Me has a proposal that will not generate any negative effect.

Take 30% of the gross monthly remunerations of the Ministers and those Civil Servants with gross monthly pays over $100Ks to subsidize those employers affected by the minimum wage legislation.

As the percentage of locals(Singapore citizens) having gross monthly of $1.2K is not many, me believes the 30% mentioned should be adequate. Even if there is shortfall, there should be other ways to find the fund.

Pardon me for the simple suggestion, because it is simple and causes no ill effect, me thinks it is good proposal. Me also sees no reason why any employee(owner employee excluded) on payroll should be remunerated to the tune of anything more than $100Ks a month. And if they are so remunerated, there is no need for them to spend or save all their salaries.

And do go ahead and laugh, should one finds this proposal laughable.


Anonymous said...

HK is taking baby steps in minimum wage and achieving just a bit more human dignity for their low-income citizens. But at least they have the guts to try it out. Currently HK's minimum wage also does not apply to some jobs where very very little Hongkies want to do, such as maids and construction workers. This ensures that Hongkies interests are looked after, while not increasing the business costs of certain industries that has very little or no Hongkies participation.

HK's minimum wage is just HKD28/hour --- that's just SGD4.64 at today's exchange rate. It's only SGD41.76 each day, if you work 9 hours a day. If you work 5.5-day workweek, your monthly pay at HK's minimum wage is merely SGD1002/mth. And yet the PAPies don't even have the guts to even explore this option.

PAP does not even want to *think* about minimum wage. When Low Thia Kiang suggested the govt to setup a committee to study and investigate the feasibility and impact of minimum wage, one PAP MP immediately dismissed Low by saying that minimum wage will result in more low-income workers being unemployed. Hello!! Low is not asking for minimum wage to be immediately implemented. He is just asking for it to be studied! This shows that PAP MPs are not only deaf, but also too stupid to understand simple english.

Anonymous said...

The outcome of the next elections will tell whether not just minimum wage but also wide income gap, casinos, foreign talents, high cost of living, high HDB prices, etc, etc are really an issue.

If it is still 50% walkovers and 66.6% mandate, how would Lucky Tan react and blog about? Alamak, all my literary efforts wasted? Hahaha.

Things will be interesting, blogs or not, in the times ahead.

Towkay said...

The Final Solution is to ship useless Singaporeans to lower cost countries to live in. Our GLCs will tie up with these countries to build gated communities where non-working Singaporeans can live and breed. This will free up space for more foreign talents to come to Singapore.

This is a win-win situation for everyone. Towkays will enjoy lower manpower costs from the FTs. Singaporeans will no longer complain their pay cannot feed their family.

I am giving my vote to PAP to implement these.

Anonymous said...

An extract to show that another big flood of foreigners is going to arrive Singapore after the general election 2011.

Remember that the last general election was on May 2006 and immediately after this, the floodgate to let more foreigners to flood Singapore was opened more wider.

Look like history is going to repeat itself again in 2011.

++++++++STRAITS TIMES++++++++++++
History-making year ahead

What will this year have in store for Singapore?
As Insight gazes into the crystal ball, eight events and issues loom large.

Productivity Push
Will it slacken?

...As labour market tightens, their main worry is the rising foreign worker levy, which will make it more expensive and harder to hire non-Singaporeans.
...Bank of America Merrill Lynch's Dr Chua thinks it is likely that the second stage of the levy increase - it is scheduled to increase this month, and again in July - may be tweaked, or delayed, to give business some breathing space.
"They planned for the levy increase to be phased in over 2 1/2 years, ...
"There is a case to be made that some recalibration is necessary," he adds. "But I see it happening
only after elections."

The full description of the above review is from
The Straits Times Review insight on Saturday, January 8 2011
Page A10 and Page A11.

The important points are highlighted here. We should take note that there will certainly
be another big flood of foreigners arriving Singapore after the general election 2011.

Towkay said...

Obviously 1 million FTs are going to come after next election. Otherwise how to get 6.5M population by 2020?

By then, I should be able to get graduate employees for $1000 a month. And I can increase the price of my products by 100% due to the increased demand.

Singapore is so wonderful.

Anonymous said...

Do you mean Five Hours of Group Think by the pap mps?

Fools don't differ and don't think.

What about this: a schedule of the sort of jobs that a minimum wage will apply. It can be national but not necessary compulsorily comprehensive. Many jobs with skill content don't really need a minimum wage protection. Minimum wage as in wage level sufficient to meet survival.

Anonymous said...

wait... you mean workfare only pay out $80 and the rest go to CPF? Is it possible to live with less than $3 a day?

Anonymous said...

there wun be min wage one
but i foresee a 10% gst for order to help all those not so well to do blue color workers

10% will be good for everyone

Anonymous said...

Is the minimum wage going to benefit locals or foreigners?

Anonymous said...

Instead of a minimum wage policy to help the low imcome workers, they prefer to spend more on foolish activities like the one below. Meaning that more and more poor people will require professional help. Implementing a minimum wage policy can reduce the number of citizens seeking financial assistance,allowing them to live in dignity without resorting to handouts.

The Party Whip had already underlined that the top leaders will not want a minimum wage for the country. The 5 hours wayang is meant for public consumption that , yes, they have debated. We all should be familiar with this typical behavior by "Our Government Reoresentatives" by now. For whom shall the bells toll? Definitely our interests are not taken care of, and we are fools to believe so. At the end of the day, these so-called leaders are taking care of their own rice bowls.

Initiatives to boost professionalism of social workers in S'pore
By Monica Kotwani | Posted: 13 January 2011 1235 hrs

SINGAPORE: The Minister for Community Development, Youth and Sports has suggested a talent development scheme to boost the professionalism of the social services sector.

Speaking at an industry seminar, Dr Vivian Balakrishnan said the scheme could be administered by the Ministry or the National Council of Social Service (NCSS).

Dr Balakrishnan said: "I'm considering a scheme in which we'd centrally employ some social workers. This would consist of people who are already in the profession.

"We would also offer scholarships to top students, pay for their education in social work. We would then have a central pool of top notch social workers who'd be seconded to the ground, work on the front-lines."

Dr Balakrishnan said they could also be rotated to work on policies and even academia.

He acknowledged that the social service sector is currently fragmented.

There are 37 Family Service Centres (FSCs) run by the various parent organisations.

In such a scenario, Dr Balakrishnan said the FSCs might not have the opportunity to be exposed to the various challenges and there might not be enough opportunity to upscale, especially in a small organisation.

He also said he was acutely aware that within the Ministry of Community Development, Youth and Sports and NCSS, there are not enough people with ground experience in policy making areas and he hopes the talent development scheme would help overcome this.

Dr Balakrishnan also announced that a new division will be set up within NCSS to provide more support for the Family Service Centres.

It will engage the centres regularly to understand their operational constraints and how the government can better empower them to serve the needs of the community.

It will also make resources for expertise available so FSCs can tap on to gain best practices from which their strengths could be built on and quality of services uplifted.

However, no date has been set as to when the division would be up and running.

Details will be announced by NCSS at a later date.

- CNA/fa

Anonymous said...

its quite simple most of the sitting members of Parliament hold multiple directorships in various business concerns, most of which require cheap labor or cheap qualified staff , why would they implement Minimum wages this addition to payroll will come out of their own director's cut and profit , it is much cheap to pay a minimum sum under workfare just enough to keep the work force alive on Tax payer dime because 1,its not out of their pocket 2,keep people begging rather then standing on their own 2 feet.
all the first world countries have minimum wages heck even third world countries also have it . so whats so special about Singapore. please do keep it mind that all the businesses who are "cost sensitive" are already gone from Singapore so its just a myth that economy will suffer only thing which will suffer is the take home money of these "Directors" nothing else

Anonymous said...

Min. wage, foreign talent, productivity are all intertwined together.
Look at SIA, CIAS, CAAS, probably firms that give the most attractive benefits to its employees. You get tip top service. The reason for the recent dip in service standards? Influx of foreigners into the companies, where they are lower in productivity and less service oriented mindsets. Of course, erosion of wages bcose of these cheaper fellas.
Min wage helps to make sure all Singaporeans earn a decent respectable level of income, and with the daily worry of survival out of the way, people will put the minds at ease and give double effort to the company and therefore increase productivity.
Simple behavioural sciences, which our MPs, despite earning millions, will not able to grasp!

Alan Wong said...

What kind of warped logic is it that by having a minimum wage the employer is not going to raise the wages of the workers anymore in the future ?

Doesn't that Zorro Minister know that the same argument is also equally true if there is no min. wage in the first place ?

How convincing can he be when he says that they will not even have a job ? He didn't even give us some examples where this is the actual case !

I may not be convincing but I certainly think he is not a very clever Minister.

Anonymous said...

the 66.6% voted those pple
66.6% dun need minimum wage

The reason why PAP will NOT implement min wage is because poor people are weak and their votes can be bought cheaply. They will also be too busy trying to stay alive and have no time to visit Lucky's blog.

Is that so difficult to understand?

Congrats Lucky! PAP has heard your whining! The answer to housing problem is to ... raise seller's stamp duty! Whine some more .. 10% GST to help the poor! Casino 3 & 4 to solve gambling issues!

Anonymous said...

The poor don't deserve minimum wage. As a boss, I constantly think of how to make them work harder and longer for smaller pay. If possible, I even wish to cut their pay further or reduce their bonuses.

I want to cut their pay because I want more money for myself. Savings for the company means either I get more money or my business accumulate more spare cash for further investment.

I rather dump my money into stock repurchases or upgrade of equipment. Giving pay raise is seriously the last resort or lowest level of investment into the company.

Don't believe me, go and ask and see how many towkays out there disagree.

Towkay Neo

Anonymous said...

after i've heard one of them said, "we should teach them how to fish, not just giving them fish to eat" regarding the bringing down the retirement age.

I was so raged. they are crapping nonsense.

The cpf money is our own money. By retiring at 60 should be sufficient.

And it is not a debate at all. They probably all agree to no minimum wage. The 'debate' is just a presentation to officially say NO minimum wage.

Most of them should already have their own private business. By implementing min wage, it will hurt their pocket in addition to the probably decrease GDP resulting from min wage.

Anonymous said...

Towkay Neo is right. Many of us took a pay cut during bad times. When the company turned around and made lots of money last year, management debated on how to spend the money to grow the company.

They talked about everything from opening new branches to repurchasing company shares in the SGX. As for the workers who endured pay cut and worked OT for free, they were only recommended for a 3% pay raise. Management thought 3% was too high, and in the end, only gave them a 1.5% increment plus $150.

Anonymous said...

They can "rationalise" all night long. The more they talk, the more they are telling us there's nothing for us in Singapore. Greedy bastards who only take care of their own family and give no damn for society. Do we serve the government or does the government serve us? Why don't they debate for reduction of their salaries so that we can help the poor and misfortunare ones in our society. I hate my leaders.

LKYcalledme DAFT said...

The know they are fighting a losing battle. They know they are losing control. Just look at the sort of laws this new team of ministers have put up. So they are thinking, let's get our money while it lasts. They know they had a good run. We've been had. Big time. You will end up with peanuts to retire on your CPF and you will work like a dog with no minimum wage in your 60s. As you grow older in this country, you will lose more and more respect. You are voting for this life.

Anonymous said...

Anon 17.01 hit the nail on the coffin.

Brilliant! It's a fact that our ministers are sitting chairmen and directorships on my many companies. They have a vested interest with these companies to represent these companies' interest more than the citizens's needs. We're fucked. All these CEOs will be lobbying behind their directors to push against the minimum wage. Again, we're fucked.

Anonymous said...

How come our Parliament debate is always circling around cost and benefits. Did anybody talk about their hearts' principle and universal values? Maybe we are grooming a generation of people without value and principle?

Anonymous said...

How is workfare going to ensure wages will not be further lowered?

If more and more fall into the low income group, how much workfare is going to be enough? With increasing demand for workfare, wouldn't the cost be pass on to Singaporeans?

Anonymous said...

they dun want to do min wage, fine!
ask them to cap on their and see

Anonymous said...

Fuck you so-called Towkay Neo...are you really a towkay or taogay? Maybe a wannabe...give me your business address so that I can give some business to you...

Anonymous said...

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.

Birds of a feather flock together.

Anonymous said...

"Anonymous said...
Congrats Lucky! PAP has heard your whining! The answer to housing problem is to ... raise seller's stamp duty! Whine some more .. 10% GST to help the poor! Casino 3 & 4 to solve gambling issues!

13/1/11 20:11"

Well, the problem does not lie in these solving tools.

The problem lies in applying all the wrong tools which are not going to solve any problem but instead going to aggravate the problem.

The problem lies with them of not wanting to hear the real alternative solution as they are too invested in their own policies (sacred cow which has become too big a monster).

Anonymous said...

Opening the gate to more immigrants doesn't increase the working population in proportion to the elderly population. The China one child policy means that each immigrant from China has to support two parents. So for every worker from China you bring in you would have to provide medical resources, elderly support and more for two elderly people. Same goes for Indian nationals, they usually apply to bring their parents to Singapore. Isn't it going to make our aging population worse? I don't see how it's going to help our situation of low birth rate and supporting an increasingly large elderly population. I'm not against supporting your parents, but I'm saying that PAP's logic is flawed.

Anonymous said...

We (Singaporeans) may need spurs stuck into our ass because we're not as 'driven' as the immigrants. That's because we're not as desperate. So while it means we're not going to work ourselves to death to earn a few extra bucks, it also means that most Singaporeans are not desperate enough to cheat and lie and steal to succeed. There is also more responsibility to who they work for and what they do. Look at all the funny foods (fake eggs, fake milk) that gets sold in China and do anything to succeed even if someone gets kicked out of their house and have to live on the streets. Is that the kind of drive that LKY is talking about?

Kay said...

I'm an American PR, 15 years in Singapore, on the management committee of our estate. Got so tired of seeing the Singapore old man cleaners have to come here 7 days a week, 6 full days Monday to Saturday + mornings on Sundays, that I proposed to our management committee we let the cleaners take a half-day on Saturday, just like the gardener who goes off at noon. What did the rest of the committee say? Not one person agreed: "cannot interfere with their own cleaning company rules...they want to work so they can earn enough to cover their expenses..." blah blah, what kind of society is this, where middle-class people living in semi-d landed property can agree to having their citizen-uncles slave seven days a week for them, only to sweep a few leaves up on the driveway and walkway? For god's sake, I wasn't even proposing a six day week, just two half-days instead of all day on Saturday and half-Sunday! I truly don't get it, and I don't understand why my colleagues aren't more proactive about setting a model in their own estate. Damn right Singapore needs a minimum wage.

Anonymous said...

Good for you Kay. For doing something about it even if you didn't succeed. On top of min wage, there should be max working hours as well. No one should work 7 full days a week and get paid peanuts. Any body working beyond 40 hours a week should get OT and paid extra for it.

Anonymous said...

The spurs are not in our hides yet. That is why we must insist that our cleaners work 7 days a week for peanuts.

I know of coffeeshop owners who froze the pay of their cleaners and workers for the past 10 years. Any "increase in business cost" usually relates to the boss' own increase in pay, or rental or renovation. Pay can always be cut or froze, because the unions have no power to fight for workers, and there is no law on minimum wage. Also, there are lots of foreigners to exploit.

It is also the same in the civil service. There are secondary schools who threaten their teachers into working 13 hours a day, including Saturdays. Those who refuse to comply or cite family reasons will be penalized during their work reviews.

It is a nationwide problem affecting not just the poor but the middle class too.

Anonymous said...


They are only interested in themselves. U think they are interested in u or yr well-beings?

Anonymous said...

Haha....There may soon come a day when the leaders in Sin flock to other lands and never to return.

Anonymous said...

To Anonymous said... 14/1/11 10:16,

At least teachers are much better treated.
Teachers get to enjoy
1 week of March holiday,
4 weeks of June holiday,
1 week of September holiday,
6 weeks of Nov-Dec holiday,
1 day of Teacher Day holiday,
1 day of Youth Day holiday,
1 day of Children Day holiday,
1 extra day of National Day holiday,
Teachers are paid to enjoy these holiday,
and the best thing about Teachers is that they are highly paid,
e.g, fresh graduate teachers pay is the second highest, just less than the doctors pay, among all the different professions.

Anonymous said...

singapore workers union is for show only, for the sake of having one. unlike countries like france where workers union really got effect.

Anonymous said...

Workfare is a subsidy that invariably will create the moral hazard of employers abusing employees through low wages. Employers knowing that the Government will provide Workfare to their employees will have no incentive to increase productivity because if productivity is raised, they will need to pay a higher wage. Workfare accentuates structural unemployment and is an unimaginative and convenient solution.

Raising productivity should be the key as that will propel worker upgrading and hence potentially a higher pay.

Finally, to Lucky. Thanks for creating this blog. I enjoy reading some of your thoughts.

Anonymous said...

of course, if our leeders say the sun rises in the west and sets in the east, the miw will similarly "debate" that indeed, it is so. That is the level of rigour in our parliamentary debates!

Waterside Inn said...

Letting all these old fogeys work 7 days a week is for their own good! the body under stress will function better and ward off any illnesses. Doctors keep telling us to exercise, so instead of a 300/mth gym membership, we are giving 500/pm to these foegeys which otherwise would have nothing to do.

In Singapore we take good care of our old donkeys even if they can carry goods up the hill. Of course if you are a rich old man like my dad, you can always play golf at a 300k membership club and take care of your plants in a 1m greenhouse.

I always tell my dad, so many old man are more fortunate. "you spend a few k a month just to find something to do, People are getting paid to enjoy retirement, pumping gas and collecting plates". He always replied, we are victims of our own sucesss. Alas! the old people in singapore are truly blessed

by the way in the event of a PAP loss which the odds is calculated to a cosmic infinity, we do have our Australian Passport to fall back on and yes canadian PRs too.

But as my dad always says, "no matter who the govt is, they will not say no to benefit"

seems like only the poor is naive for a regime change. being unsuccessful in life is the fault of govt. Tunisian dont get it, neither will singaporeans!

waterside inn said...

seems like only the poor is naive for a regime change. being unsuccessful in life is NOT the fault of govt. Tunisian dont get it, neither will singaporeans!

Sorry typo errors....was distracted by caviar supper

Anonymous said...

To anon 03.20 ........You are truly blessed. Apart from your frequent caviar suppers, abalone dinners etc, may you also be blessed with many $8 bypasses! Cheers!

Anonymous said...

//We just want our dignity.//,8599,2045278,00.html

Goes to show the GDP growth is not ALWAYS a winning formula. Perhaps SGreans should "wait till we smell the burning tyres" before we mark X on the card. It will shake PAP to the core, and it will be a day of reckoning for Singaporeans. The "wait and see" attitude are the lame excuse for not ACTING. That's how Germany as a collective nation (millions of people can't be wrong mentality) allowed Hitler to triumph with his genocidal program.

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