Is a Minimum Wage a Bad Idea for Singapore? - Sally Yuan

In the United States of America, even after several increments within the decade, the issue of minimum wage remains an essential topic for debate. In the United Kingdom, even in the unprecedentedly difficult economic climate, the minimum wage was raised from £5.73 to £5.80 an hour in May 2009. Conversely, in Singapore, one of the few developed countries which do not have any regulations stipulating a minimum wage, the segment of society consisting of the poorest paid are exposed to the exploitation of business operators.

The argument offered by the government against imposing a minimum wage was the fear that Singapore will lose its competitive edge by raising the labour cost, thus forcing multinational corporations to relocate to less expensive countries.

I found the argument barely valid. The minimum wage regulation seeks to protect only a very small portion of the working population, people who are already at the bottom of the social ladder. It is a lack of social justice for the government to allow organisations to pay their employees less than what would be needed for their families to live a humble but decent life, and yet pay their top executives extravagant bonuses every year. To raise a few cleaners’ salary from S$650 to a reasonable S$1100 a month is not likely to cause a major expense crisis in a company.

Countries like Vietnam and India have much lower cost structure; companies with a sole criterion for cheap labour would not have chosen Singapore, with or without a minimum wage. A minimum wage policy is necessary to protect the interests of working people, but does not necessarily have to impinge on the companies’. In most developed countries, hitherto, minimum wage enforcement has not proved to be inimical.

Companies that rely heavily on cheap labour are not the ones that we would like to see flourish in Singapore. They benefit neither the society nor the people.

The government has attempted to assist the low income group with direct cash subsidies, food vouchers and tax relief. I think that a minimum wage policy is a much more effective way of ensuring that the people who are willing to work are decently paid, and encourage those who are unemployed to work.