A realistic minimum wage not possible in unique Singapore

In 2012, Professor Lim Chong Yah called for “a drastic hike in salaries of low-income workers in Singapore” and the implementation of minimum wage after years of wage stagnation. Depressed wages, as we all know, is directly linked to PAP’s red carpet policy for cheaperer foreign workers.

Prof Lim had suggested raising the monthly salaries of workers who earn S$1,500 or less by 50 per cent over three years. He also suggested freezing wages of those who earn over S$15,000 a month for the same period simultaneously.

But after 5 years and the absence of real workers’ unions, the ‘helpless’ government could only set guidelines for employers and beg them to follow. Most don’t.

In 2012, 454,000 residents earned less than $1500 per month. Last year, the figure was 382,000. Over the same period, residents earning more than $12,000 a month increased by 30,000 to 136,000.

The unofficial PAP poverty line in our high-cost country was raised to $2,000 a month last year where 657,000 residents still earned less than this amount.

Unproductive sectors should be allowed to fail but the government has been depressing wages – by throwing billions in tax dollars in all sorts of schemes – to keep them in business .

According to theory, the implementation of minimum wage will lift many Singaporeans out of poverty. In reality, this is not going to happen in unique Singapore.

Prof Lim should have known certain facts pertaining to Singapore but strangely, he had not taken them into account:
– A pro-biz government.
– The number of large Temasek-linked companies whose labour cost will skyrocket.
– Unproductive PAP-affiliated companies which require cheap labour to remain profitable.
– PAP’s failure to increase productivity since 3 decades ago.

Why would PAP shoot itself in the foot by increasing labour cost via the implementation of minimum wage or a drastic hike in salaries of low-income workers?

Prof Lim’s call for action to raise wages of low wage workers gave our fake workers’ unions and fake labour chief an opportunity to wayang away. Shortly after Prof Lim’s suggestions, Lim Swee Say proclaimed: “Singapore’s model of minimum wage taking shape“. Lim is not known as a jester for nothing.

Lim came up with a complex minimum wage model consisting of 3 components, ie WIS + WTS scheme + Progressive Wage Model.

The Workers’ Income Supplement scheme, or WIS, calls for the salaries of workers earning less than $2000 to be topped up with tax dollars. This is another typical PAP simplistic ‘solution’. 😦

Since 2007, PAP has thrown billions in tax dollars at WIS, ie the annual budget for WIS has increased from $200 million in 2007 to $770 million this year. This has benefited GLCs but low wage Singaporeans are still struggling.

WIS scheme is an insult and demeaning to citizens. A person aged 35 and below earning less than $2000 per month will receive only $50 in cash and $75 going into GIC. Er .. I mean CPF.

Unlike other really wealthy countries, Singapore is truly unique and depressed wages are here to stay. 😦

It’s a waste of time to elaborate on the other 2 components of PAP’s minimum wage model. PAP’s WTF? minimum wage model is merely a transfer of tax dollars to GLCs and companies which should have closed shop a long time ago. Not forgetting also for GIC to speculate.

Prof Lim should have also known that a drastic increase in the wages of low income workers will eventually have a knock-on effect on wages of middle income workers. For example, the pay of cleaners can’t increase from less than $1000 to, say, $1500 with salaries in the 3rd and 4th lowest decile remaining unchanged.

Minimum wage has to be linked to productivity which has hardly increased during the past decades. With PAP’s serious addiction to cheap foreign labour for over 2 decades, the government has no idea what productivity growth is all about.

PAP’s complicated minimum wage model is all hogwash, eg transferring $462 million tax dollars to GIC, etc and has expectedly failed to meet any objective.

In view of our really ‘unique’ situation where there is no workers’ union and more than 2 decades of economic expansion through population growth while disregarding productivity growth , implementing a realistic minimum wage has never been possible.

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