Sunday, September 01, 2013

Cost of living and minimum wage

The minimum wage in Jakarta was 1.5 million rupiah per month (about SGD 200) last year. It was raised to 2.2 million rupiah this year by Governor Jokowi.

Even 2.2 million is not enough, as the cost of living in Jakarta is quite high. Some experts have calculated that the minimum wage should be raised to 3.5 or even 4 million rupiah. 

Recently, the Jakarta administration set an example to employsome people at a salary of 4 million rupiah - just to show the point.

While businesses want wages to be as low as possible, they have to realize that the wages should be sufficient to meet the cost of living and give people a decent life, and have some savings for the future.

Singapore should also address the issue of the cost of living and the minimum wage. We cannot just pretend that the problem does not exist, or can be left to be sorted out by the market.

If rentals, government charges, top management salaries and excessive profits can be kept under control, the increase in consumer prices due to higher wages can be moderated.

This will lead to a better balance in our society, and a smaller gap between the top and low income brackets.


yujuan said...

Could easily make a guess why Govt keeps mum mum on minimum wage, all boils down to Greed.
Dun wan to control rentals as Authorities want to make more money selling public land for development, high auction prices lead to high rentals.
Hv to increase Govt charges to pay exorbitant salaries for the civil servants.
Companies hv to foot high management pay to retain high quality staff.
Businesses encouraged to make more profits, contributing to higher GDP growth, which translate to higher bonuses for Govt Ministers.
Who gets the wrong end of the stick?
The lower wage earner of course, he has to be the sacrificial lamb to this whole game of Greed.
This is the only carrot to retain foreign businesses to stay put in Singapore.

Xianlong said...

Economic situation here is getting more & more screwed up.

At the nearby Sheng Siong supermarket, the police has put up a signboard: 4 arrested for shop theft.

More low wage earners will become desperate as the pap policies continue.

The ministers don't know since they don't do grocery shopping at the heartlands.

Divine Moo-Moo said...

The government may implement and even support the minimum wage concept, but ultimately it will still be the open market forces that decide and affect the price index for products locally.
If oil prices increase, thereby exerting an upward force on Cost of Production, prices must also rise accordingly to meet that change. Otherwise, how will companies survive with a profit margin?

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