Tan Kin Lian's Blog: Why we need a minimum wage policy in Singapore

Thursday, December 11, 2008

Why we need a minimum wage policy in Singapore

http://theonlinecitizen.com/2008/12/sporeans-and-foreigners-both-paying-the-price/#comments

Free competition in the labour market, without safeguards, will continue to push down wages. With outsourcing of many types of work, the wages of the contract workers have now fallen below the subsidence level. Many family now needs two or three jobs to earn enough to survive.

Many countries solve this problem by introducing a “minimum wage”. I suggest that the minimum wage in Singapore should be SGD 10 an hour. If this wage is applied to cleaners, shop attendants and other low income jobs, there will be sufficient Singaporeans who are keen to accept these jobs - rather than remain unemployed.

We should continue to control the number of foreign workers who are allowed to take these jobs. The employer should be required to provide acceptable standard of accommodation and medical benefits to these worker. This will increase the cost of these foreign workers, and reduce the attraction of their “lower cost”, as compared to local workers. The foreign worker’s levy can continue to be levied.

If we need foreign workers to increase the pool of manpower, let us welcome them as long term immigrants. If they bring their family here, they will have to face the same high cost of living and cannot depress the wages fo local workers. This will be the subject of a separate discussion.

A minimum wage policy may mean that the customers have to pay more for these services. But, the increase may not be as large as feared. The wages of the workers is only one component of total cost. The other components are rental, profit and management salaries. I expect that, in a competitive market, these other components will fall to more reasonable levels, before the charges to the customers are raised.

Some people argued that higher wages will fo force businesses to locate to other countires. This argument does not hold water for the domestic service sector, which will be an important source of employment for the local people.

Anyway, we do not need many businesses in Singapore to create employment for foriegn and local workers who earn below the minimum wage. The large number of foriegn workers working in Singpaore at the depressed wages will create social problems that are not fully realised at this time.

I like to ask for support for a minimum wage policy in Singapore. This is social justice and fairness. It is for the long term good of our society.

Tan Kin Lian

Minimum wage should be $8 per hour
Someone told me that $10 an hour may be too high. He suggested that a minimum wage of $8 per hour may be more acceptable for a start. This gives $1,280 a month for 8 hours X $8 X 20 days = $1280. I agree.

Results of Poll
Poll, "Should a minimum wage policy be implemented in Singapore?"
Number of replies: 173
Yes: 75%
No: 18%
Not sure: 7%

23 comments:

Anonymous said...: Re: Guaranteed That Poor People Will Squandered Away Their CPF Money

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Quote:
Originally Posted by clinton666
If we allow the lazy poor people to withdraw their CPF, they will develop a crutch mentality and who is going to take care of these dumbasses when they get old. I am certainly not going to pay huge taxes to feed these lazy goons.

Those poor people who claim that they can take care of their own CPF money are bullcrapping. If they knew how to manage their money, they would not be poor in the first place.

REPEAT. Giving these lazy riff-raffs access to their CPF money is akin to giving them crutches. They will never learn to walk again.

In fact, only rich people like me should be allowed to withdraw our CPF money since we are well educated and have proven that we have to know-how to take good care of our money.

My Central Provident Funds savings is my hard earned money, through my BLOOD, SWEAT & TEARS (not the pop group)!.

When I retire I want that sum of money, that was what the fund was started for in the first place in the year 1955!!!!

What I do with that retirement money, wether I am educated or not, that is my money, I worked hard for it, I did not steal it, is my business.

Wether I splurge the entire sum on whatever luxury within 5 mins I get hold of it, is still my money, I will be happy, just to spend it.

Don't go insulting all the hardworking people, who worked hard to get that savings.

In this rapidly eroding world, any cent obtain from CPF, is money in hand, we never know, one day, we may never get even a cent back!. Established fianancial institution that had been around for more than 300 years can collapse, Lehman Bros etc..comes to mine, why not CPF?

So, don not insult the lowly educated, who by their BLOOD, SWEAT & TEARS worked hard for their retirement money (CPF) and help built this country, whom we call, SINGAPORE!; December 10, 2008 9:58 AM
Daniel Ling said...: Hi, although i agree tat there is a issue, but i do feel tat implementing a Min Wage may not be able to solve the root problem. Let's just talk about Min Wage first.

It's a fact tat SG strives on foreign investments, coys, etc and we can't deny it. Nor are we able to rapidly change this fact in the next 10, 20 years simply becoz we are a small country where the strength is our pple.

$10 per hour may not be alot, i'm unable to fathom how much is too little, too much or enough. But if assuming tat Min Wage is really implemented, with the trend of the world now, to get similar workers in other countries at cheaper price isn't impossible anymore.(Both Blue, White Collar, Low to Mid to High Income)

Although the companies won't be able to just up and leave but this is a consideration for the future.

So if our Min Wage is higher than another country (Assuming same skills available) or worse, other countries do not ve Min Wage (Again, same skills available) then we would ve lost our strength which is our People.

The above is about Min Wage, next my view/opinion on the Root Issue which may be entirely wrong.

The reasons y we are asking for Min Wage obviously is due to the fact tat Money not Enough. Y is this so for SGeans, if we sit down and think about it, likely we can generate a whole new long list so i won't touch on tat.

I'll just assume tat Cost Of Living is High. Just about that for a Middle Average Disposable Income. (I'm using myself as a example) So if this is a case, wat about those below the Middle Average Income?

So isn't the Cost of Living the root cause? But of coz i realise tat there's many reasons for the High Cost of Living and if it's forcefully reduce, it may cause other issues too...

But well, i'm just a Middle Income which doesn't count as a Talent and I sincerely do not ve any suggestions on how this issue may be resolved.; December 10, 2008 10:57 AM
Parka said...: A direct consequence of the minimal wage system will be inflation in goods and services. Businesses will just have to cover the salaries they pay out by increasing the price of items they sell.; December 10, 2008 10:58 AM
Parka said...: I want to add that if companies want to remain in business with the rising people cost, then they will have to be more efficient (or ruthless) to make that profit.; December 10, 2008 11:00 AM
Anonymous said...: Erm, can the anonymous above label where the quote ends next time? It makes comments easier to read.; December 10, 2008 12:58 PM
Anonymous said...: the above chap do not understand the evil of inequality in society.

we can't achieve a harmonious society without sacrifices.

what sacrifices?

begin with the rich and able not taking advantage of their weaker brethren!

tkl - jia yew jia yew; December 10, 2008 1:38 PM
Anonymous said...: I have been thinking for sometime, is Singapore going to be a huge sweat shop for the lower income people to work in? Worker Union in Singapore is known to be useless. If government is unwilling to spend on her people then she is simply as useless as the worker union. When both are unwilling to do something, it is possible for Singapore to become a sweatshop for all low income workers.
Young citizen, like me can start to think of their life as (1) senior citizen (i.e. being seen as a treasure when young but a trash when old) or (2) low income group working in the sweat shop. (i.e. work for a low pay) e.g. CPF contribution is lower for the employer portion for the elderly.
During good time, only corporate/govt enjoy high profit but elderly/low income group get nothing (share of the profit). However, during bad time, poor people have to suffer with them. What is this??!!! Sweat Shop??!! It is time for minimum wage to be in place.; December 10, 2008 3:17 PM
Victor Foo said...: I am supporting this motion. There is indeed a certain minimum wage a person staying here needs to take home for basic necessities.; December 10, 2008 4:42 PM
Anonymous said...: Mr Tan
I totally agree there should be a minimum wage for employees, especially those on CONTRACT or PART-TIME basis.

In Singapore (compared to other 1st World countries!), employers exploit these workers, paying as low as $4 per hour for shift work during WEEKENDS/PUBLIC HOLIDAYS and AFTER 7PM shifts. In Western countries, these hours would be considered OVER-TIME !!

To add insult to injury, Singapore employers demands that applicants be YOUNG, possess computer skills, bilingual, ability to multi-task, etc., etc., etc. Paying peanuts but expecting Wonderwoman!!!

chew; December 10, 2008 4:45 PM
Anonymous said...: Should start with Max wage policy. Why would you need to pay 8 million a year to a guy to run a company like SGX? What is the difference if we get another guy who is willing to accept 0.9 million? Are you sure the next guy who accept 0.9 million can't perform better?; December 10, 2008 7:36 PM
Anonymous said...: $8, is simply too high as a minimum pay.

$6.80 will be a much more reasonable. This will not put too much pressure on SME.; December 10, 2008 9:19 PM
Anonymous said...: I am just wondering. Is low income such a serious problem in SIngapore? Are the low income people or those who are dissatisfied also the majority? If so how do you explain over 60% voted for the PAP at every election? Maybe only 33% are low income or dissatisfied? So it may not be a major issue among the population of voters after all. That's why PAP is not worried at all because the majority likes them.

So try not to be in the 33% category in Singapore. Study hard, work hard to get a good job, good pay or do some business to earn good money. Don't hope for any other thing. Hope is a four letter word.; December 10, 2008 9:24 PM
Unknown said...: Ok another perspective

Lets cast aside Minimum Wage and none there is

In a Free Market, assuming an Unemployed person was offered an option of whether a Low Wage Employment or No Employment

The bad news is if he has decided Low Wage Employment, then according most of the arguments herein so far, he has to go thru the pains to decide whether if the Low Wage Employment is better or worse than No Employment

On the other hand, the good news is if he's offered No Employment, he doesnt have to even have to begin to worry about any those arguments isnt it?

Hmm hows that for Choice; December 10, 2008 10:36 PM
symmetrix said...: Anonymous,

Over 60% voted for PAP at every election because:-

1. There is no good alternative govt.
2. Fear that the price of their HDB flats will fall if a non-PAP party comes into power.

Most SG ppl are so obsessed with their property that they would be willing to sell their souls to the devil for their property's sake.

Things will change for the better when Mr Tan KL steps into parliament.; December 10, 2008 10:48 PM
Anonymous said...: 7:36

funny thing, that too crossed my mind today.

the concept of min wage may not work without max wage limit.

it is time we reward the "less gifted" or disadvantaged by circumstances fairly in monetary terms and pander less to the "better gifted" by curtailing a king's ransom with ridiculous perks( sucking up their axx - if you mind the language)

it is good for the soul and society if we stop corrupting our able people with excessive wealth( and power) and channel back some of these excesses to those who work( humble jobs) equally hard but are less recognized or appreciated( in terms of rewards)

that may involve a revolutionary change in our union. they should be empowered to oversee a philosophical change in our reward system.

whether humble work or over glorified work, we can't do without each other and our reward system should reflect that.; December 10, 2008 11:00 PM
Anonymous said...: $10/per hr would works out to $80 per day. Unless we are willing to pay $10 a loaf of simple bread, $300 per month of conservancy fees, $2 for a bus ride. The towkays employing these workers are not filthy rich. Really cannot afford this level of wage rate. Have to be reasonable.; December 11, 2008 1:06 PM
C H Yak said...: On the same parity of currencies between S'pore & China (i.e. taking $1 the same as 1RMB), $1280 per month is comparable to the minimum wage policy being implemented in China which is a communist country and has a more matured and established retirement pension scheme and medical insurance scheme than Singapore. Not forgetting their cost of living is much lower than S'pore.; December 11, 2008 3:22 PM
Anonymous said...: In response to CH Yak:

Facts:
Exchange rate: SGD 1 = RMB 4.6
Purchasing parity: SGD 1 ~ RMB 3
(based on 'The Economist' estimate using the price of a 'Big Mac')
Minimum wage per month in China various in different regions and can go up to RMB 810 per month in say Shenzhen.

RMB 810 is equivalent to SGD 176 (using exchange rate conversion) or SGD 270 (using purchasing parity conversion).

SGD 176 or SGD 270 per month are the equivalent minimum wages and not the SGD 1280 figure mentioned by CH Yak.; December 12, 2008 10:47 AM
C H Yak said...: In response to 10.47 AM :

In Singapore, you we take economic data with a pitch of salt.

You probably used data from some published China website. We have to take China data with a double pitch of salt.

The minimum wage published there probably does not include 1. overtime wages; 2. subsidies for night shift work, working at high or low temperatures, in mine shafts, or in workplaces where conditions may be harmful, and so on; and 3. payments for insurance and welfare.

Item (3) welfare includes pension which we do not enjoy here.

For an average retiree there who held a supervisory post before, the retirement income is well above RMB 1,280 for city-dwellers.

If you factor all these in and forget about the forex, take it on same parity, $$1,280 here is comparable to the spending power there for RMB 1,280 in an average city.

Recently, they are pushing for minimum wage & pension to be raised further.; December 12, 2008 5:59 PM
Unknown said...: guys you are all discussing Minimum Wage like its some sort of Holy Grail

Cabbies in China are FIGHTING for passengers who are willing to go as far up as RMB5 max for an inter-city trip.

Thats barely SGD$1.

Considering the size of THEIR CITY, even a Bus ride beyond 3 stops here costs more than that.

That draws a rather clear picture of reference isnt it

I am sure some will dispute VIGOROUSLY, by all means!; December 12, 2008 11:24 PM
C H Yak said...: In response to Wayangnologist

The picture is not as clear as you had described in your post.

The flag-down fare for a cab is certainly about RMB10 or more. I don't think they will go inter-city for RMB5. Perhaps S$5.00 (not RMB) could get you a seat in an inter-city coach service.

In many China cities, the bus fare is still a flat RMB1 from "head" to "tail" station if non-aircon. If air-con, it is a flat RMB2. Seats may not be better than SBS / Transit Link but you frequently see seats being given up to the old folks and small kids, unlike here. And the frequently is certainly much better than our SBS / Transit Link.

They need no large weird billboard adverts (like Santa Claus, God of Wealth) on the buses, and I think the bosses of these public bus companies certainly do not collect million dollar salaries.

But you get to where you want pretty fast despite the unruly pedestrians crossing at roads and their bus drivers (many are woman) find no problem to filter out despite the absence of signs that our LTA is studying to impose.; December 13, 2008 9:33 AM
Unknown said...: "The flag-down fare for a cab is certainly about RMB10 or more."

I should have expected this rebuke, I can understand why anyone could be paying that. That anyone obviously hadnt been there long. enough.

In fact most FOREIGNERS should be paying that.

Its called Fleecing the Foreigners ...the moment they open their mouth.

I am talking about Locals paying Local rates. Non Carrot Head Type. The same pt of reference for Locals here using Local Public Transport here.

Wont anyone admit even some Foreigners reportedly got fleeced by our taxis here of 'world class transport' claim

BTW took their buses very very infrequently

Firstly some travel warning, its almost like begging to be pickpocketed once the gang sense you are not local thereabouts.

Secondly the Cabbies are just too darn cheap and with their metal grills they are WAY WAY more weary of me than themselves.; December 14, 2008 4:01 PM
Anonymous said...: Why are you comparing S'pore to China? Why not to cost of living in S'pore....necessities like PUB bills, rentals and basic food.; August 12, 2009 7:34 PM

Thursday, December 11, 2008

Why we need a minimum wage policy in Singapore

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