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Sent: Friday, March 08, 2013 6:53 PM
To: MP LIM S ; <a title="LEE_HSIEN_LOONG
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Subject: 20130308 Singapore’s model of minimum wage taking shape?
Dear Mr Lim Swee Say
I refer to CNA article “Singapore’s model of minimum wage taking shape: Lim Swee Say” dated 6 March. http://www.channelnewsasia.com/stories/singaporelocalnews/view/1258284/1/.html
Mr Lim seems to be confused with real minimum wage and Singapore government handout in the form of WIS supported by WTS and PWM.
Mr Lim also said that “The third component is the labour movement’s progressive wage system where four factors are pulled together to improve the workers’ well-being.”
This cannot be further from reality because WIS has already become a permanent feature. Has the government conducted a survey of low income workers if their well-being has improved?
It is the abject failure of the labour unions and government policies that have resulted in at least 480,000 Singaporeans qualifying for government handouts.
As it can be seen from the above table, the total payout is insufficient. To make matters worse, as if life for the WIS qualifier was not bad enough, the government locked away 70 per cent in the CPF account! So for a person earning about $800 per month, he receives twenty-three dollars and fifty cents per month in cash ($283/12 months). Fifty years ago, such an amount would have made a big difference.
Budget 2013 finally acknowledged the miserable cash component by increasing it to 40 per cent from 30 per cent. Using the above example, the increase is a paltry $8 a month. Even with an increase of between 25 to 50 per cent in the cash component, the increase for workers earning less than $800 per month in the 35 to 44 age group, is an embarassment to the government to be even mentioned.
Assuming a minimum wage of $1200, all low-wage workers earning below this amount will benefit many times more than the WIS handout, both in cash and in CPF.
A floor for wages will naturally adjust other wages through market forces. This will then not require perpetual government tinkering and frees the government from micromanaging the economy.
Minimum wages covers workers of all ages whereas WIS does not. This means a huge percentage of 25 per cent of Singaporeans are not included under WIS.
The government is extremely reluctant to implement a policy of minimum wages because it has been able to transfer business costs in the form of the above triple acronym to taxpayers. This amount is significantly lower than the amount borne by businesses should a policy of minimum wages be implemented.
Is this due to the government being involved in ‘too many’ businesses and losing sight from a people’s perspective?
“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.
Why is Mr Lim bragging that it is “more than a minimum wage model” when it has essentially failed Singaporeans. To be frank, all this talk of maximising and minimising is really incoherent and illogical.
Transferring business costs to taxpayers is really nothing to be proud of. What does it take to wake the government up to acknowledge that a large percentage of Singaporeans do not earn enough to raise a family? Is giving them tens of dollars per month not an insult today’s high cost of living?
Including more Singaporeans into WIS confirms a worsening problem and not the generosity of the government. Should our maxi-mini model fare worse than anticipated, does Mr Lim intend to increase the current 30 per cent recipients to, say, 70 per cent eventually?
As the government continues tweaking here and there and make belief that we do indeed have a superior minimum wage model, we will fall even further behind other countries.
Hong Kong had theirs 3 years ago and neighbouring Malaysia implemented minimum wages on Jan 1 this year. No talk of upside or downside, just uncomplicated minimum wages as it is.
WIS has been around for 6 years and the situation is not getting any “betterer” but has in fact taken a turn for the worse.
Please stop treating the symptoms as increasing the dosage is clearly not the remedy.