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23-07-2021, 11:54 PM
Implementing minimum wage can become “political auction”, leaving businesses and workers worse off, says NTUC’s Koh Poh Koon
The National Trades Union Congress’ (NTUC) deputy secretary-general Koh Poh Koon stated in Parliament on Thursday (15 October) that the Workers’ Party’s (WP) proposal of implementing a minimum wage of S$1,300 could result in a worse situation for businesses and workers, and also become a politicised issue.
Dr Koh pointed out that Government initiatives like the Progressive Wage Model have already helped increase the wages of lower-income workers. He said this during Thursday’s debate on Deputy Prime Minister Heng Swee Keat’s ministerial statement on the Government’s strategies to rise stronger from the COVID-19 crisis.
Ever since the recent General Election in July this year, one topic that has been widely discussed is definitely on the minimum wage.
On Monday, WP chief and Leader of the Opposition Pritam Singh called for a universal minimum wage by setting S$1,300 as a base for Singaporean workers. Pointing it out in a Facebook post, Mr Singh said that this is not a “moral imperative” but “an act of national solidarity”.
Minimum wage can lead to “political auction”
During his speech, Dr Koh, who is the MP for Tampines GRC, raised three arguments. They are that a minimum wage could be a disadvantage to the lowest-skilled and most vulnerable workers as it is difficult to find the right value; that it could possibly become a political tool; and raise the question to where it should be applied to migrant workers as well who make up more than 1.3 million people in the Singapore workforce.
He explained that it “defeats the purpose of having a minimum wage” if the amount set is too low, emphasising the difficulties in setting the right minimum wage. On the other hand, if the amount set is too high, then some businesses might not be able to afford it, resulting in them ceasing operations, retrenching workers or passing on the cost to consumers.
“This is a particularly pertinent consideration at this time when we are in deep COVID-19 crisis. Many companies, especially your SMEs (small and medium enterprises), such as those in the construction sector, are suffering and not quite out of the woods,” he noted.
If that’s not all, the Tampines GRC MP also questioned Mr Singh’s point on setting a universal minimum wage as a “moral imperative”.
“Today, let’s say we can all agree to S$1,300 minimum wage proposed by the WP, a ‘moral imperative’ as Mr Singh puts it in his recent Facebook post. But what next? What happens next? How will this number change from this year to the next, and on what basis?” said Dr Koh, who is also a Senior Minister of State for Health.
He added, “In a political contest, a political party will surely come along and say, well, S$1,500 will reflect a higher ‘moral imperative’. Yet another will come along and say, S$1,300 is good, S$1,500 is better, but S$1,700 must surely be more divine ‘moral imperative’. It can become a political auction.”
Rather than a minimum wage, Dr Koh highlighted the benefits of the Government’s initiatives to help low-wage workers – a mix of the Progressive Wage Model (PWM), Workfare Income Supplement (WIS) scheme and training programmes. He said that these plans help to increase the incomes of low-wage workers without putting their jobs at risk or raising consumer prices significantly.
For example, he explained that PMW allows workers to increase their productivity, which gives them a chance for promotion and higher wages.
“Workfare is another significant intervention. It acts like a form of negative income tax – the Government tops up the income of workers earning less than S$2,300 per month,” he added.
Dr Koh went on to state that the “vast majority” of 850,000 workers in jobs normally labelled as low-income, like service staff, cleaners and clerks earn above S$1,300 a month.
Separately, about 100,000 who earn below S$1,300, including self-employed would not benefit from a minimum wage, he said.
Additionally, with workfare disbursements and Central Provident Fund contributions by employers, 56,000 earn less than S$1,300. And out of the 56,000 workers, 32,000 – or 1.7 per cent of the local workforce – work full-time.
“So what the WP wants to achieve with the proposed minimum wage of S$1,300 a month, we have already achieved through PWM and many other policy measures.”
https://www.theonlinecitizen.com/2020/10...-poh-koon/
The National Trades Union Congress’ (NTUC) deputy secretary-general Koh Poh Koon stated in Parliament on Thursday (15 October) that the Workers’ Party’s (WP) proposal of implementing a minimum wage of S$1,300 could result in a worse situation for businesses and workers, and also become a politicised issue.
Dr Koh pointed out that Government initiatives like the Progressive Wage Model have already helped increase the wages of lower-income workers. He said this during Thursday’s debate on Deputy Prime Minister Heng Swee Keat’s ministerial statement on the Government’s strategies to rise stronger from the COVID-19 crisis.
Ever since the recent General Election in July this year, one topic that has been widely discussed is definitely on the minimum wage.
On Monday, WP chief and Leader of the Opposition Pritam Singh called for a universal minimum wage by setting S$1,300 as a base for Singaporean workers. Pointing it out in a Facebook post, Mr Singh said that this is not a “moral imperative” but “an act of national solidarity”.
Minimum wage can lead to “political auction”
During his speech, Dr Koh, who is the MP for Tampines GRC, raised three arguments. They are that a minimum wage could be a disadvantage to the lowest-skilled and most vulnerable workers as it is difficult to find the right value; that it could possibly become a political tool; and raise the question to where it should be applied to migrant workers as well who make up more than 1.3 million people in the Singapore workforce.
He explained that it “defeats the purpose of having a minimum wage” if the amount set is too low, emphasising the difficulties in setting the right minimum wage. On the other hand, if the amount set is too high, then some businesses might not be able to afford it, resulting in them ceasing operations, retrenching workers or passing on the cost to consumers.
“This is a particularly pertinent consideration at this time when we are in deep COVID-19 crisis. Many companies, especially your SMEs (small and medium enterprises), such as those in the construction sector, are suffering and not quite out of the woods,” he noted.
If that’s not all, the Tampines GRC MP also questioned Mr Singh’s point on setting a universal minimum wage as a “moral imperative”.
“Today, let’s say we can all agree to S$1,300 minimum wage proposed by the WP, a ‘moral imperative’ as Mr Singh puts it in his recent Facebook post. But what next? What happens next? How will this number change from this year to the next, and on what basis?” said Dr Koh, who is also a Senior Minister of State for Health.
He added, “In a political contest, a political party will surely come along and say, well, S$1,500 will reflect a higher ‘moral imperative’. Yet another will come along and say, S$1,300 is good, S$1,500 is better, but S$1,700 must surely be more divine ‘moral imperative’. It can become a political auction.”
Rather than a minimum wage, Dr Koh highlighted the benefits of the Government’s initiatives to help low-wage workers – a mix of the Progressive Wage Model (PWM), Workfare Income Supplement (WIS) scheme and training programmes. He said that these plans help to increase the incomes of low-wage workers without putting their jobs at risk or raising consumer prices significantly.
For example, he explained that PMW allows workers to increase their productivity, which gives them a chance for promotion and higher wages.
“Workfare is another significant intervention. It acts like a form of negative income tax – the Government tops up the income of workers earning less than S$2,300 per month,” he added.
Dr Koh went on to state that the “vast majority” of 850,000 workers in jobs normally labelled as low-income, like service staff, cleaners and clerks earn above S$1,300 a month.
Separately, about 100,000 who earn below S$1,300, including self-employed would not benefit from a minimum wage, he said.
Additionally, with workfare disbursements and Central Provident Fund contributions by employers, 56,000 earn less than S$1,300. And out of the 56,000 workers, 32,000 – or 1.7 per cent of the local workforce – work full-time.
“So what the WP wants to achieve with the proposed minimum wage of S$1,300 a month, we have already achieved through PWM and many other policy measures.”
https://www.theonlinecitizen.com/2020/10...-poh-koon/
