Singapore’s model of minimum wage taking shape: Lim Swee Say

SINGAPORE: With on—going calls for Singapore to have a minimum wage concept, the labour movement believes the Republic’s own model of minimum wage is taking shape.

Speaking during the Budget debate in Parliament on Wednesday, NTUC secretary—general Lim Swee Say said the Singapore model is made up of three components.

The first component is the Workfare Income Supplement (WIS) for all workers earning below $1,900.

Hence, WIS is a way of topping up the salaries of these workers.

The second is the Workfare Training Support (WTS) scheme where low—wage workers’ skills are upgraded quickly.

The third component is the labour movement’s progressive wage system where four factors are pulled together to improve the workers’ well—being.

These are skills, productivity, career path and the workers’ wages.

"With the WIS, WTS and Progressive Wage Model, we believe we now have a minimum wage model. In fact, it’s more than a minimum wage model whereby we can maximise the upside of low—wage workers and at the same time minimise the downside," said Mr Lim.

The labour chief also said that the labour movement is encouraged by the government’s three—year transition support package for companies to restructure.

He said he is more confident this time round that productivity will take place because the government has decided to tighten on the increase of foreign manpower.

Mr Lim said: "It is important for companies to recognise that as we enter this new phase of development...the limiting factor of the Singapore economy...is actually manpower. Given that situation, the wise thing to do is to try to break this manpower bottleneck by making best use of every worker and every person, by giving every worker the best opportunity and do the best to reward them."

Weighing in on the hotly discussed Wage Credit Scheme, Mr Lim said companies have at least three options to choose from.

The first — to not increase wages and risk losing workers in the current tight labour market.

The second — to increase wages without making any changes to their operations.

Mr Lim said if companies were to use the Wage Credit Scheme (WCS) to lower wage costs, they would return to square one in three years when the scheme is up.

He warned that is when companies would face even greater challenges.

Mr Lim said the third option is for companies to take full advantage of not just the Wage Credit Scheme but the total offerings in the three—year transition support package.

He said this is the preferred option for the labour movement.

"We really hope that more companies will make full use of the PIC (Productivity and Innovation Credit), WCS and all the programmes to invest in productivity gain and share the gain," said Mr Lim.

Parliament also discussed efforts to help Singaporeans keep costs down through the cooperatives.

On Tuesday, opposition MP Png Eng Huat said that while NTUC Foodfare was touted as a social cooperative, it was a members—only organisation as one needs to be a union member to enjoy special prices.

Mr Png had referred to the decision to appoint NTUC Foodfare to run the first new hawker centre in Bukit Panjang and said if the co—operative was enjoying subsidised rental, then it must benefit all consumers.

MP for Marine Parade GRC, Seah Kian Peng, who is also the CEO of NTUC FairPrice, said NTUC Foodfare does not receive subsidised rental.

"NTUC Foodfare does not enjoy any subsidised rental from government or NEA in any of the premises they occupy. (Foodfare) still has to make an offer and if successful, pay market rates for the premises, like anyone else," said Mr Seah.

"So I find some of the comments made yesterday a bit incorrect...they also cast a slur on our efforts and demean the work of the many people who work in and for co—operatives."

Mr Seah stressed that co—operatives are a check on pure market forces and they have social, not political ends.

— CNA/ir