Minimum Wage – The Good, the Bad and the Truth
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Minimum Wage – The Good, the Bad and the Truth
By Damon Yeo
The Bad about Minimum Wage
The term “minimum wage” can almost be labelled as “dirty” in Singapore. For a long time, the government had insisted that having a minimum wage in place could do more harm than good. In a recent Straits Times report, MM Lee had noted that every country that has set a minimum wage over what the market will bear has found that the move cuts jobs and that Singapore’s aim is to create as many jobs as possible.
In the world of economics, the view is subscribed by many economists.
The purists argue that minimum wage laws are distortions to the market equilibrium and will theoretically increase unemployment. Adam Smith’s famous invisible hand theory will mean that artificial setting of price (wage) floors makes allocation of resources inefficient.
In Singapore’s context, the administration of any minimum wage policy will have spill-over effect on our immigration policies. Minimum wage policies cannot apply solely to Singaporeans, as this will make employers turn to cheaper foreign labour. However, if these policies were to be applied to PRs and migrant workers as well, we will see a further influx of foreign workers to our shores, since they are expected to pick up even higher pay then before.
Another area of concern is inflation. For 2008, inflation was 6.5%. A minimum wage policy is likely to have a bigger impact on construction, food and the general service industry (these industries are generally where workers are paid less). Prices of houses, food and most household items are likely to increase as cost of the labour providing them goes up with minimum wage.
The Good about Minimum Wage
Naturally, minimum wage laws have their supporters as well.
The loudest of voices on this side of the debate comes from those who fight to increase the standard of living for the poorest and the most vulnerable class in society. A minimum wage policy will ensure that the so-called “bottom” ten percentile of the society will still be able to earn enough to sustain a respectable lifestyle. Naturally, this will reduce the income gap between the richest and the poorest of the nation.
Others have noted that a minimum wage law does not add burden to the government. Unlike welfare benefits, cash payouts or tax credits to the poor, this policy will not require the government to increase its spending.
Some have argued that a minimum wage will improve the work ethic of those who earn very little as the higher pay helps motivate them more. It also encourages employers to have a tougher labour screening process, ensuring that better quality staff is hired as they now have to pay more for each employee. In Singapore, this may help raise the quality of the service industry – an area which had particularly deteriorated over the years.
The Truth about Minimum Wage
The first ever minimum wage policy was set in state of Victoria in Australia way back in 1824. It was enacted in 1904 and the British were the first to conduct studies on the effects of the minimum wage in 1907. United States, the symbol of big conglomerates and capitalism, first introduced the Federal minimum wage in 1938 and it has been in place ever since.
As of 2009, Singapore is only one of 10% of the nations in the world not to have any law or regulation of some sort in terms of minimum wage. It may come as a surprise, but even countries like war-torn Afghanistan, Iraq and the Democratic Republic of Congo have some sort of national law to set the minimum wage employers must pay (whether they are actually enforced is another matter).
And amongst those that 10% of nations that do not have a national law on minimum wages are all of the Scandinavian countries and others like Switzerland and Germany. However, in these countries, trade unions are renowned to be particularly strong (and definitely independent of any government influence) and wages are usually set by collective bargaining between the unions and the employers. It is worthy to note that in most of the Scandinavian countries, the disparity between the rich and poor is the narrowest in the world.
While acknowledging that there are studies out there to prove otherwise, there has been extensive research done to show that in fact there is a positive correlation between (a higher) minimum wage and level of employment (ie unemployment went down in places with a higher minimum wage). From a behavioural point of view, it can be argued that people are more motivated to find work if the minimum that they can earn is higher.
On the argument on reduction of competitiveness with a minimum wage, let’s not forget that while Singapore is the third most competitive economy in the world without such a policy, nine others in the top ten have some sort of minimum wage policy or notably very independent and strong trade unions.
Furthermore, a minimum wage policy is unlikely to affect a majority of the industries where Singaporeans are employed by multinational overseas companies. From an international perspective, there is little to suggest that such a policy will hurt our competitiveness. After all, it is not the lifestyles of high-earning lawyers, bankers and accountants that will be changed by such a policy – it is that of lowly paid cleaners, hawker assistants and construction workers.
In the United Kingdom, the minimum wage first became legislation in 1999, under the Labour government. There was much debate from the public, unions and the Opposition prior to its implementation, but research afterwards has showed that this new Act definitely did not increase level of unemployment in the country. Let’s also not forget that over the decade just passed, London surged ahead of her European counterparts to become a leading global financial centre (something Singapore is aspiring to be).
The people who first came about with the idea of a minimum wage had one motivation in mind – to protect individual workers from being exploited by factory owners for the benefit of more profits. From whichever angle you look at this, you must admit that this motive can only be a good thing, akin to the abolition of slavery.
With Singapore slowly creeping up the list of the most expensive cities of the world, the time is now for us to relook into enacting a minimum wage policy to start protecting those who might have already been exploited, even if not intentionally, by circumstances.
Sources:
1) David Card and Alan B. Krueger, “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania,” American
Economic Review, Volume 84, no. 4 (September 1994), pp. 774-775.
2) www.ilo.org/public/english/protection/condtrav/pdf/infosheets/w-1.pdf
3) Waltman, Jerold. “The Politics of the Minimum Wage.” University of Illinois Press. 2000
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I don't think it is a question of for or against minimum wage. It is really a question of micro-managing, in whatever forms, that the govt will not involved in.
Consider the cost and feasibility of policing and regulating of such law. Can such law be policed? Can they be effectively regulated?Currently, we have the quota system for foreign labour. Even with this quota system, the employers are playing a cat and mouse game with MOM.
There is that one cat (called MOM) against hundred of thousands of mouse (called employers) out there. This the reality.
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Finally a good article on minimum wage!
The word is, no economist have said that minimum wage was bad.
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It's true what people are saying:
Sg workers cannot have a minimum wage to remain competitive.
Ministers must have a minimum wage to remain competitive.
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Originally posted by charlize:
It's true what people are saying:
Sg workers cannot have a minimum wage to remain competitive.
Ministers must have a minimum wage to remain competitive.
Actually equating Ministerial salary with minimum wage is a misnomer or is it socratic irony.
charlize the Queen of socratic irony.
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Originally posted by deepak.c:
Actually equating Ministerial salary with minimum wage is a misnomer or is it socratic irony.
charlize the Queen of socratic irony.
Ministers' salaries are pegged at 2/3 of Top 8 earners right?
That is their minimum wage.
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Originally posted by charlize:
Ministers' salaries are pegged at 2/3 of Top 8 earners right?
That is their minimum wage.
The minimum wage is in fact a ceiling of top earners not a floor.
Now imagine standing on your ceiling.
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Originally posted by deepak.c:
The minimum wage is in fact a ceiling of top earners not a floor.
Now imagine standing on your ceiling.
Well, if you look at it this way, then their max wage is also their min wage.
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Originally posted by 4sg:
I don't think it is a question of for or against minimum wage. It is really a question of micro-managing, in whatever forms, that the govt will not involved in.
Consider the cost and feasibility of policing and regulating of such law. Can such law be policed? Can they be effectively regulated?Currently, we have the quota system for foreign labour. Even with this quota system, the employers are playing a cat and mouse game with MOM.
There is that one cat (called MOM) against hundred of thousands of mouse (called employers) out there. This the reality.
Seriously, if you think that it is too much for this PAP government - or that it is not capable - to micro-managing anything that it sets out to do, you got to think again.
With LKY and his PAP government involved in every aspect of Singaporean life, and interfering even in the number of children a couple should have, the age to marry, and who should marry who - the government has already interfered as much, if not already more then it should.
The minimum wage is but just another step that LKY and the PAP government has refused to accept responsibility to ensure that wages keep pace with the cost of living, which the present National Wage Council is impotent to make any decision to help Singaporean workers.
The National Wage Council is a sham council that is supposed to be a tripartite council consisting representatives from the Government, the Employers and the Workers - but in reality, the government is the majority with itself and its symbiotic relationship with the Trade Union that represent the Singapore workers.
This leaves the employers sandwiched between the government and the trade union with its head also a Minister-without-Portfolio in the Government.
As in every dealing with the PAP Government - it is the usual one sided rule in the favor of the PAP Government.
Can the views of Singaporean workers be honestly represented ?
Can the views of the government on the minimum wage - be considered as honest, when all decisions taken are for their own interests that are at stake ?
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Originally posted by charlize:
Well, if you look at it this way, then their max wage is also their min wage.
I think it's more like their minimum wage is everybody's maximum wage.
If you really want to compare, their salaries is really stellar, compare the average wages of advanced economies and their Ministers with OURS.
Ordinary Singaporeans make $1,200 a month, citizens of advanced economies make at least 3 times that; Ministers of advanced economies make only afew hundred thousand dollars while our Ministers make afew millions.
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Anybody has statistics on what the modal income is for Singapore? I'd like to compare the mode and the median/average.
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I personally think that the high wage scheme cook up by the Pap has created a demand pull wage inflation making it worst in a small city like Singapore. It actually contribute to higher cost of doing business to compete for limited Talent Pool
In fact having minimum wage might help to reduce high wage inflation in time of crisis like this... with high cost of energy and depressed employment.
And of course not to mention the crowding out effect has brain drain Talent from private to public sector.
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Originally posted by Atobe:
Seriously, if you think that it is too much for this PAP government - or that it is not capable - to micro-managing anything that it sets out to do, you got to think again.
With LKY and his PAP government involved in every aspect of Singaporean life, and interfering even in the number of children a couple should have, the age to marry, and who should marry who - the government has already interfered as much, if not already more then it should.
The minimum wage is but just another step that LKY and the PAP government has refused to accept responsibility to ensure that wages keep pace with the cost of living, which the present National Wage Council is impotent to make any decision to help Singaporean workers.
The National Wage Council is a sham council that is supposed to be a tripartite council consisting representatives from the Government, the Employers and the Workers - but in reality, the government is the majority with itself and its symbiotic relationship with the Trade Union that represent the Singapore workers.
This leaves the employers sandwiched between the government and the trade union with its head also a Minister-without-Portfolio in the Government.
As in every dealing with the PAP Government - it is the usual one sided rule in the favor of the PAP Government.
Can the views of Singaporean workers be honestly represented ?
Can the views of the government on the minimum wage - be considered as honest, when all decisions taken are for their own interests that are at stake ?
NWC is only a national guidelines, you dun have to follow it ya.Just like last year, i paid my staffs 6 months bonus, so be it, why must follow them to freeze or cut cost as per recommended by NWC, how much can a professor who chaired the Council knows about the feeling of workers in Joo Chiat or other places??
Singapore adopted a free economy, they wanted the paid structure to be flexible and able to move along with the market condition, and it had served us very well, so why do we need a mini wage control??? the market adjustment is better than mini wage control. There are pros and cons in mini wage control, if economy is up and times are good, people can be paid at mini wage, which is do reflect the situation, thereby making employers more richer, i can alway tell a worker this is the regulation, but without Mini wage, paid are flexible and market control, if i want a worker, i have to match the market paid and on top of that, i need to add in more to more paid competitive against my competitors. And if this workers is on demand (skills or knowledge), he will get much more than a mere mini wage.
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Originally posted by angel7030:
NWC is only a national guidelines, you dun have to follow it ya.Just like last year, i paid my staffs 6 months bonus, so be it, why must follow them to freeze or cut cost as per recommended by NWC, how much can a professor who chaired the Council knows about the feeling of workers in Joo Chiat or other places??
Singapore adopted a free economy, they wanted the paid structure to be flexible and able to move along with the market condition, and it had served us very well, so why do we need a mini wage control??? the market adjustment is better than mini wage control. There are pros and cons in mini wage control, if economy is up and times are good, people can be paid at mini wage, which is do reflect the situation, thereby making employers more richer, i can alway tell a worker this is the regulation, but without Mini wage, paid are flexible and market control, if i want a worker, i have to match the market paid and on top of that, i need to add in more to more paid competitive against my competitors. And if this workers is on demand (skills or knowledge), he will get much more than a mere mini wage.
Only a dumb Taiwanese "hum" will see the Natinal Wage Councils recommendations as anything else but as guidelines - as the words are intended.Only a Taiwanse "hum" will expect anyone to believe that paying "6 months" bonus is due to its generosity - when it will not mention that it pays nothing in minimum wages, and with the bonus dependent on how much it takes from the pockets of those uncles whom it is able to fool.
Is there anything to be proud of ?
Can the 6 months bonus compensate the high prices that those women who sold their flesh to receive the 6 months bonus once a year from the Taiwanese "hum" ?
"6 months bonus" is equivalent to the amounts paid to the workers employed by the Petroleum Companies in Singapore, and with this bonus paid in addition to the high salaries that these petroleum workers are paid.
Can it be believed that the Taiwanese "hum" will pay as much as the Petroleum Companies pay their staff ?
Obviously, the 6 months bonus is another ploy by the Taiwese "hum" to satisfy its needs as an "Attention Seeking Whore".
Did the Taiwanese "hum" check with its Man that it calls "Daddy" or "Sugar Daddy" before showing off its clitoris outside its cockle shell to draw attention to itself ?
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I predict 40 years from now, the PAP, if the party survives till then, will admit that the No Minimum Wage policy was wrong.
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Originally posted by Atobe:
Only a dumb Taiwanese "hum" will see the Natinal Wage Councils recommendations as anything else but as guidelines - as the words are intended.Only a Taiwanse "hum" will expect anyone to believe that paying "6 months" bonus is due to its generosity - when it will not mention that it pays nothing in minimum wages, and with the bonus dependent on how much it takes from the pockets of those uncles whom it is able to fool.
Is there anything to be proud of ?
Can the 6 months bonus compensate the high prices that those women who sold their flesh to receive the 6 months bonus once a year from the Taiwanese "hum" ?
"6 months bonus" is equivalent to the amounts paid to the workers employed by the Petroleum Companies in Singapore, and with this bonus paid in addition to the high salaries that these petroleum workers are paid.
Can it be believed that the Taiwanese "hum" will pay as much as the Petroleum Companies pay their staff ?
Obviously, the 6 months bonus is another ploy by the Taiwese "hum" to satisfy its needs as an "Attention Seeking Whore".
Did the Taiwanese "hum" check with its Man that it calls "Daddy" or "Sugar Daddy" before showing off its clitoris outside its cockle shell to draw attention to itself ?
Aiya, seibei cham one, this uncle. Go buy 4D sure die. Suay Suay SuayAnyway, NWC is only a national guidelines, it is not a laws, it recommendations looks lame to me, same same every year, only different is that the Council members can go for a gathering retreat in different part of the world each year. And of cours, at the expenses of tax payers like you and me.
I paid 6 months, last years due to economy booming, but foreigner get 2 month only, cos they are NTS workers, do the laundry, washing, clean rooms and pubs. But my bartenders, waitress, waiters, bouncers, cooks, delivery guys who also work as Chauffuers get between 4 to 6 months, 6 months goes to good performance Singaporeans.
The main point in NWC is to give wages base on performance, better still is to give it in a form of variable rather fix cost into their salary which will be able to sustain in a long run.
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Originally posted by googoomuck:
I predict 40 years from now, the PAP, if the party survives till then, will admit that the No Minimum Wage policy was wrong.
tell me, what is the minimum wage of Singapore you want to set??, if you are the govt going for minimium wage policy. -
Originally posted by angel7030:
Aiya, seibei cham one, this uncle. Go buy 4D sure die. Suay Suay SuayAnyway, NWC is only a national guidelines, it is not a laws, it recommendations looks lame to me, same same every year, only different is that the Council members can go for a gathering retreat in different part of the world each year. And of cours, at the expenses of tax payers like you and me.
I paid 6 months, last years due to economy booming, but foreigner get 2 month only, cos they are NTS workers, do the laundry, washing, clean rooms and pubs. But my bartenders, waitress, waiters, bouncers, cooks, delivery guys who also work as Chauffuers get between 4 to 6 months, 6 months goes to good performance Singaporeans.
The main point in NWC is to give wages base on performance, better still is to give it in a form of variable rather fix cost into their salary which will be able to sustain in a long run.
As expected, the Taiwanese "hum" cannot even read English properly that it iwill want to make an impression to insist on satifying its insatiable needs as an "Attention Seeking Whore".Did the man your call "daddy" or "sugar daddy" approve of your public boasting of how much you pay to your workers, or is this another one of your deluded displays at making useless unsubstantiated claims that no one will be able to nor want to verfiy ?
Your post has driven the discussion off-track in your expert ways to draw attention to your irrelevant existence in this thread.
What exist in your claims are only from a deluded mind that only you will create to satisfy your own needs to achieve satisfaction for your needs as an "Attention Seeking Whore".
Originally posted by angel7030:
tell me, what is the minimum wage of Singapore you want to set??, if you are the govt going for minimium wage policy.Can an "Attention Seeking Whore" have any influence to change the government position in having the "minimum wage policy" implemented ?
If this is not another worthless piece of irrelevance to perpetuate its flippant ways.
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Just tell me what is minimium wage you want, and i see if i can work on it, maybe have coffee with that Gan Kim Kim and that Lim Swee Swee, and we can talk it over and come back to you
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Originally posted by angel7030:
Just tell me what is minimium wage you want, and i see if i can work on it, maybe have coffee with that Gan Kim Kim and that Lim Swee Swee, and we can talk it over and come back to you
The shameless Taiwanese "hum" will be deluded enough to beleive that its "hum" is worth any salt when it hang its clitoris out of its shell.Its been clipped which explains for your needs to seek all the attention as needed by an "Attention Seeking Whore".
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Haiz, always dun believe me...we can also get SNEF stephen Lee to sit in.
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Originally posted by angel7030:
Haiz, always dun believe me...we can also get SNEF stephen Lee to sit in.
Yes, the Stephen Lee that you revealed going up to Novotel with your two gals whom he gave a big tip afterwards.
Did he clipped your clitoris too and got you bitching about his exploits at Novotel ?
Or is this another one of your deluded attempts to satisfy your alter-ego as an "Attention Seeking Whore" ?
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Let me add on to this topic.
There has been no research so far that min wage will be a disadvantage, most developed countries have adopted this min wage thing are doing well....Singapore is the only country in th elist that have not. So according to them, this makes the companies in those countries set up base here. But the lack of min wage has proven disadvantage in attracting workers in some sectors especially the service sectors. The lack of min wages in singapore also affects Purchasing power parity ,disposable income which contribute to lower retail performance of consumer goods. As a result it also affects consumer markets as people tend to spend less . This in turn has a ripple effect across the economy.
So far it has not been proven that prices of houses, food and most household items are likely to increase as cost of the labour providing them goes up with minimum wage. In reality, such prices are more directly controlled by market forces than min wage.
But in singapore there is no min wages but prices have climbed steeply with no min wages. Thats the most shocking thing.
How do u explain this effect?
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you have to look at the symantics of the minimum wage. its to prevent exploitation by unsrupulous employers on employeers. the fast food crew staff are really underpaid, 3 dollars per hour worked? its really pathetic pay, where you stand and worked so hard an hour in fast food restaurant, and you are paid only 3 dollars per hour?
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Originally posted by Rooney9:
you have to look at the symantics of the minimum wage. its to prevent exploitation by unsrupulous employers on employeers. the fast food crew staff are really underpaid, 3 dollars per hour worked? its really pathetic pay, where you stand and worked so hard an hour in fast food restaurant, and you are paid only 3 dollars per hour?
even this $3 will have problem attracting cheap foreign labour because if u factor in their living cost while here, they dont even have much to send back home to their foreign countries. Dont be surprised their wages are all eaten up by inflationary singapore.
These people will rather go to other countries having the same job paying 3x more, why would they want to come here..