Minimum wage, or Best wage?

Singapore workers

SINGAPORE: Would Singapore be better off with a minimum wage system or with Workfare programmes such as the Best Sourcing Initiative and the Inclusive Growth programme, to help low—wage workers level up in society?

That was the theme in the speeches of several MPs during the Parliamentary debate on the government’s commitment to inclusive growth.

MPs also urged the Government to continue doing more, to support low skilled and low—wage workers.

All 17 MPs, together with labour chief Lim Swee Say and Manpower Minister Gan Kim Yong took part in the debate.

Singapore’s economy experienced sterling growth in 2010.

And MPs say such growth must provide opportunities for the majority to enjoy higher incomes and better quality of life, and improved prospects for low—wage workers.

But of late there’s been a robust debate about minimum wage, with many saying it will encourage lower skilled Singaporeans to seek work.

MP for Bishan—Toa Payoh GRC Josephine Teo said: "The proposal of a minimum wage should not be dismissed too lightly.

"The supporters of minimum wage are well—intentioned and the idea certainly looks attractive.

"With a stroke of a pen, we could dictate to employers a minimum salary to pay their low—wage workers. Why are we reluctant? Within the labour movement, we are clear that government intervention is needed to help low—wage workers do better.

"The Government has responded vigorously through Workfare, BSI (Best Sourcing Initiative), IGP (Inclusive Growth programme) and others.

"So the issue is not whether (the) Government should act but rather, how it should intervene to be effective.

"The real question is ’Would minimum wage work better than all the other programmes already in place?’

"From the perspective of the labour movement, growth in the last few years has been inclusive. Our tripartite approach works.

"More vulnerable Singaporeans have found jobs. Many low—wage workers are getting better wages. Now is the time to stay on course.

"As the economy grows, now is the best time to catch the wind and help low—wage Singaporeans do better and for Singapore to become even more inclusive".

MP for Jalan Besar GRC Denise Phua said she fully supports the WIS, and is against the idea of minimum wage, which has gained traction of late.

"I fear that instituting a minimum wage will backfire on the very same people whose livelihood we are trying to protect," she said.

"A minimum wage will become an additional cost of business paid by employers who in turn will either pass on the cost of business to their customers, causing further increase in the cost of living, or become more cautious especially in hiring those who are less skilled or able.

"Parties who advocate minimum wage should dwell deeper on the subject and get some inputs from the employers, especially the smaller enterprises which are struggling to keep prices constant".

Opposition MP Low Thia Khiang said the Worker’s Party also does not support introducing minimum wage at this point of time.

"It would be preferred if our workers can command good wages by being competitive internationally and doing high—value work," Mr Low said.

"However, if our low—wage workers are still not uplifted despite efforts of productivity growth and CET, minimum wages may have to be considered."

But Mr Low’s idea that an Advisory Board do research on minimum wage for specific industries was dismissed.

NTUC deputy secretary—general Heng Chee How said: "You do that, and if the workers become unemployed, you have just converted them from low—wage workers to no—wage workers.

"Who is (then) going to be responsible for these no—wage workers and their families? I don’t recommend minimum wage but best wage."

MPs say best wages can be achieved in several ways.

One of them is to pay a Workfare Income Supplement GDP Bonus when growth is good, so that low—wage workers have something to look forward to.

A Workfare Family Bonus can be considered if two or more family members in the same household receive Workfare in the same period.

Such a bonus would encourage families to work together to improve their circumstances.

Another initiative which the NTUC has launched is the S$40 million Inclusive Growth Programme (IGP) to support the national productivity push.

Ms Teo said the IGP is only five months into implementation and already, 166 projects have been lined up.

They include projects in manufacturing, hospitality, F&B, retail, logistics, aerospace and others.

The IGP was initially conceived as a pilot programme to target the bottom 20 per cent of wage earners.

Funding support today allows for up to 25,000 low—workers to benefit at the end of two years.

Ms Teo said she hopes it can be extended to at least 100,000 low—wage workers within five years.

More will also be done to encourage women to return to the workforce.

NTUC deputy secretary—general Halimah Yacob, who fronts the labour movement’s Women Back to Work Programme, said the NTUC does not wait for women to reach out to it.

Last year, a pilot outreach programme was launched to engage women living in rental flats in Ang Mo Kio.

Moving ahead, she urged the government to continue doing more, so that more women can work and take advantage of the opportunities and ensure economic growth continues to be inclusive.

Firstly, she said there needs to be sufficient and affordable social support infrastructure such as child care and kindergarten services, as well as eldercare services, as women are still the main caregivers in our society.

Secondly, more companies should be encouraged to adopt tele—commuting and home—based work.

Thirdly, according to an MOM survey, only one in five of the economically inactive women has received upper secondary education or above.

This meant most would need retraining, particularly in literacy and numeracy skills before they could re—enter the workforce.

Madam Halimah said one possible solution would be to have numeracy and literacy courses conducted at community clubs so that these women would be able to acquire the basic foundation skills needed to land them in jobs, or for other forms of training, but in centres close to their homes and at their own pace.