Tan Kin Lian's Blog: Minimum Wage in Singapore [2]

Thursday, September 23, 2010

Minimum Wage in Singapore [2]

Read www.easyapps.sg/sgep/latest.aspx for letters and articles about the reasons for and against implementing a minimum wage in Singapore.

3 comments:

rex said...: REX comments as follows,

I have read through your article as provided in the link. Here are some views.
1. You said that if employees are paid higher (as per min. wage scheme) Rentals will fall.
Unfortunately, there will be a time period during which many businesses will go bust (they can;t afford to pay the employees) before the rentals fall. The rental is controlled by third party, not the employer who pays the employees. So the third party is in no hurry to reduce rentals of course. However if his tenant go bust and futurely nobody can afford such rents then the thirdparty landlord is forced to reduce his rent. So i think that in the LONG TERM your analysis is correct. But in the meantime, a lot of people will suffer during the early stages when min wage law is enacted. Rentals will go down very slowly after many people are sacrificed, in my opinion. Who wants to be sacrificed, that is the problem...

2. In your conclusion you said that if there is min wage the factory jobs will disappear but since there are foreign FW anyway "it does not impact on the local unemployment rate". I don't fully agree with that. Behind every factory there are sizable number of Singaporeans managing Finance, HR, Management, Logistics, etc., it is not just the production floor labour units.

Just to clarify, i have always been torn between the pros and cons of Min. Wage. The only think i dislike about is that the Govt does not open a forum for people to actively discuss. The newspapers don't encourage people to think. That is the biggest problem of this country. There is no 100% right or wrong way to go, but it is very important for people to have a chance to think, and your article sets the ball rolling.

rex; September 23, 2010 8:21 AM
Singapore Plebian said...: With a GDP per capita in excess of $30k per year, why is it that there are so many struggling to make ends meet? The answer probably lies in the distribution of income.

I think the first step in this argument is to determine our poverty line, the minimum required for subsistence in Singapore. We need to work out the top 5 line items, and then use this as a benchmark to see how many people fall below this line.

Housing - how much to pay for a 2 room flat? Utilities?
Food - 3 meals a day (doesn't have to be in a restaurant in case anyone asks again).
Transport - to get to and from work
Healthcare
Education

Once we've worked this out, we can measure what % of the population falls below this line, and then use this as an argument for or against a minimum wage.; September 24, 2010 9:12 AM
Tan Kin Lian said...: Reply to Rex:
Rental will fall after a few years. meanwhile, the profit margin and high salaries for top managers will reduce. The impact on prices will not be severe.
On the factories, many of the high level jobs are also taken by foreigners. I don't think that we need these factories in Singpaore.; September 25, 2010 12:21 PM