“Running a company is like a computer program where you monitor your cash flow ins and outs with these factors. To solve minimum wage, you need to add the factors of to the equation, where the increase of wage is compensated by productivity or automation where the output justify the increase of minimum wage. Education or retraining is another form of productivity. Therefore will there be a loss due to minimum wage? The answer is No. Because you are moving from a labour intensive worker to a more productive worker where output is concerned.”
– Contributed by Oogle.
Posted on Sep 20, 2012 9:29 PM Updated: Sep 21, 2012 6:24 PM
By Derrick Ho
The jury may still be out on minimum wage here, but a bipartisan panel agreed on Tuesday that having one wouldn’t solve the inequality problem.
The panel consisted of Minister of State for Community Development, Youth and Sports Halimah Yacob, former president of the Society of Financial Service Professionals Leong Sze Hian and opposition politician Nicole Seah.
All three agreed that having a minimum wage would actually bring its own set of issues.
“If we were to impose the minimum wage, then what’s going to happen? Are business owners willing to stay put?” asked opposition politician Nicole Seah.
Instead, they proposed having more non-wage measures to increase the purchasing power of lower income families.
Madam Halimah said that while there were some benefits to setting a minimum wage, achieving consensus among various parties such as unions, the government and workers as to what that wage should be can be a very tedious and time consuming process.
“By the time they agree, the wages have moved,” she said.
“Let’s not get boxed into the idea that minimum wage is only way to address inequality.”
One way to do it was by carefully calibrating foreign labour policy, said Mr Leong. He said that the presence of cheap foreign labour had depressed wages at low end here.
Minimum wage was by far the dominant topic in the two-hour session on Tuesday but there were also several among the 100-strong audience which spoke about the defence budget, the reserves and social spending.
All three panellists spoke about the need to increase social spending in coming years.
Mr Leong said more such spending was required to help mitigate rising costs in areas like healthcare.
“We cannot focus solely on increasing wages, we also must look at the work conditions,” he said.
He also suggested that there was already probably sufficient funds from Singapore’s investment income from its reserves or Net Investment Returns (NIR) and that there was no need to tap on the reserves.
“I do think there are a lot of areas we can trim (in the military) – even catering for the soldiers,” Ms Seah said.
Madam Halimah agreed that higher social spending was inevitable but also reminded the audience that the Government already spends a lot on housing, education and healthcare to provide a basic safety net for Singaporeans.
One notable moment came towards the end of the session when film-maker Martyn See asked a question that seem to strike a nerve.
He said: “I want to ask Madam Halimah, hand on heart… when you see an 80-year-old… elderly Singaporean cleaning the streets, selling you tissue paper, tell me how you feel? Do you want to see more of that, do you want to see less of that or do you want to eradicate that?”
Madam Halimah appeared emotional in her response as she recounted the plight of families she had met during house visits.
“There are those who said ‘I want to work, because I want to be independent, I want to have that sense of self-worth.’ I don’t want to be in a position to rob them of that.” she said.
“So let’s allow them to make the decision.”
The forum was organised by ONE (Singapore), a local non-profit organisation dedicated to eradicating poverty, and Singapore Management University’s Wee Kim Wee Centre.