The Worker’s Party (WP) wants it, the People’s Action Party (PAP) is against it, and most of us have our butts firmly planted on the fence, unsure of which is better.
The minimum wage debate is one that has raged not just in Singapore but in many countries for what seems like millennia.
Recently, however, especially since the election, calls for implementing a minimum wage model have grown louder, with master debater and heart thief Jamus Lim and WP chief Pritam Singh raising the issue in parliament.
These calls have, of course, been met with pushback from PAP MPs.
On Thursday (15 Oct), Tampines MP Koh Poh Koon went head to head with MPs from the WP on the issue on minimum wage, explaining why he believes it is ultimately detrimental to low-wage workers.
But before we get into that, what is minimum wage and why do the WP want to introduce it?
Protection Against Inordinately Low Pay
Simply put, minimum wage is the minimum wage or remuneration that an employer is required to pay employees for the work they do.
If you’ve some time to burn, here’s a video we’ve done on this topic (and do subscribe to our YouTube channel for more informative videos!):
This amount cannot be reduced by collective agreement or an individual contract.
So, for example, if Singapore had implemented a minimum wage, my boss wouldn’t be able to slash 5% off my salary every time I took a break to drink water.
Boss: Water drinking is only permitted outside office hours.
But I’m working from home. How do you even know when I drink water?
Boss: I have my methods.
The purpose of a minimum wage, according to the International Labour Organization, is to “protect workers against unduly low pay”.
It can also be used as part of a broader policy to overcome poverty and reduce inequality, including those between men and women.
This approach dictates that if two people do the same kind and amount of work, they should receive equal remuneration.
Many countries have a minimum wage model, including South Korea, Japan, Australia, and the UK.
Okay, but why do the WP want to implement it in Singapore?
A “Moral Imperative”
Now, you may have seen the sum $1,300 floating around different news outlets in the last couple of months.
This is the minimum wage proposed by the WP, for the simple reason that it’s the average monthly expenditure for a four-person household in Singapore, taking into account basic necessities such as food, clothing, and shelter.
Fundamentally, the reason the WP want to introduce a minimum wage model is that they believe it will raise the salaries and well-being of low-wage workers.
In a Facebook post on Monday, Pritam Singh once again made the case for minimum wage, saying it “is not just a moral imperative, it is an act of national solidarity, one that is even more relevant in today’s economic environment.”
So, why is the PAP against it?
Could Lead to Higher Costs & Unemployment
Koh, who is also deputy secretary-general of NTUC, outlined the reasons why the PAP are against minimum wage in a parliamentary speech on Thursday.
He said that while minimum wage is “seemingly a quick way to raise the wages of workers”, it has its downsides.
For one, different sectors will have different profiles of low-wage workers, making it difficult to set a single wage.
This, Koh said, would not reflect the realities of each sector, and could lead to unintended costs.
With higher costs, companies may end up charging consumers more, or hire fewer workers, which would lead to higher unemployment.
And if the minimum wage isn’t high enough to bring about these higher costs, it may mean that it’s not high enough to benefit workers anyway.
Implementing a minimum wage could also “price-out lower-skilled workers” and disadvantage SMEs, he said.
Could Turn Into a Political Auction
Koh added that because the driving force behind the minimum wage model is “compassion”, as Jamus Lim said, or a “moral imperative”, that the setting of the sum could become a political contest.
For example, if there are three opposition parties – WP, Party 2, and Party 3 – that advocate minimum wage, one could call for a higher wage than the other parties, because if the model is animated by compassion, the higher the wage, the better.
So WP might call for a $1,300 minimum wage. Then Party 2 calls for a $1,500 minimum wage, saying if we really value our low-wage workers, we’d pay them more.
Party 3 later urges both parties to adopt a $1,700 minimum wage instead, making the same argument.
As Koh said, this could turn into a “political auction.”
If this happens, then the minimum wage would exceed what companies can afford and end up endangering the jobs of low-income workers.
Koh also made the point that if it’s a “moral imperative” to implement minimum wage, then the “natural question to ask is whether it should include non-Singaporeans such as migrant workers, including our foreign domestic workers”.
PAP’s Alternative: The Progressive Wage Model
For those who don’t know, the PAP has not only opposed the minimum wage model but introduced a wage model of their own, called the Progressive Wage Model (PWM).
Introduced in 2012, the model actually imposes a minimum wage of sorts, but it’s customised for each sector.
This allows the authorities to tailor the minimum wage to reflect the realities of a sector, rather than using a broad system.
This means that the minimum wage for someone in the cleaning sector, for instance, may be different than a worker in the security sector.
As Koh said, the government can work with each industry to address its specific concerns and challenges and set a suitable sum for its workers.
One of the criticisms of the PWM is that it’s only been implemented in three sectors: cleaning, security, and landscape.
In response, Koh said the government has been working with its tripartite partners to extend the PWM to all sectors.
He noted that most of the 850,000 workers who are holding jobs that are traditionally viewed as low-income, such as clerical support and service staff, earn more than $1,300 a month.
Koh added that around 100,000 workers earn below $1,300, which amounts to just 1.7% of the local workforce.
WP MPs’ Response
Singh retorted that since it’s such a small number of workers who earn less than $1,300 a month, it wouldn’t be difficult to ensure that they get paid a minimum wage of at least $1,300.
“I would be prepared to work with the Senior Minister of State to ensure that we can reach out to these Singaporeans as quickly as the Government can, because I don’t think it’s acceptable that any Singaporean is earning below this number. It is simply not acceptable and if we can do something about it in double-quick time, lets do it,” Singh said.
Aljunied MP Leon Perera added that setting a minimum wage for such a small number of people would be unlikely to hurt SMEs, in terms of added costs.
Moreover, as Singh pointed out in his Facebook post on Monday, the problem with the PWM is that it takes too long to implement.
“It has been eight years, with three sectors covered. This is far too long for Singaporeans who work outside these sectors,” he said.
So, what do you think? Should Singapore have a minimum wage?
If you’re still confused, do watch this video that we’ve embedded earlier again: