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SINGAPORE – Workers’ Party (WP) MP Jamus Lim (Sengkang GRC) made several suggestions on minimum wage and compassionate policymaking in his opening speech in Parliament on Thursday (September 3), sparking a series of questions from MPs from the People’s Action Party (PAP), including Chief Minister Tharman Shanmugaratnam (Jurong GRC).
During the debate on the president’s speech, Associate Professor Lim argued, among other things, that many of the problems faced by segments of the population, such as low-wage workers, the elderly and single mothers, could be attributed to “a insufficient compassion in our policy-making process. “
While acknowledging that Singapore has a form of minimum wage in the progressive wage model (PWM), he noted that it was not universal and suggested that Singapore could implement “a simple and generalized minimum wage.”
The employment impact of such a minimum wage “would probably be very limited,” he added.
Upon questioning, Professor Lim agreed that it was not the right time to implement a minimum wage given the consequences of the Covid-19 pandemic. He also said he had no specific policies or figures in mind when making his proposals, but added that he was simply offering suggestions for further consideration and study.
Vikram Nair: What is the appropriate minimum wage for Singapore?
Mr. Vikram Nair (Sembawang GRC) asked Professor Lim what level of minimum wage would be appropriate for Singapore and if he knows of any countries with a minimum wage that also have a lower unemployment rate than Singapore.
Professor Lim replied that he did not know what salary level would be appropriate and suggested that an independent panel be formed to study this. He reiterated his claim that the minimum wage would have a limited impact on unemployment, adding that unemployment was based on “lots and lots of studies.”
WP MP Leon Perera (Aljunied GRC) then stood up to address Mr Nair’s second question, saying that the fact that another country has a higher or lower unemployment rate than Singapore may not be causally related. with its minimum wage policy.
Jamus Lim Admits Minimum Wage “Not Ideal” During Recession
Ms. Gan Siow Huang (Marymount), who is Minister of State for Manpower, said she agreed with Professor Lim that lawmakers should exercise and show compassion in policy making.
“In fact, I think that’s what the government has been trying to do in a lot of the policies, and as a result, sometimes our policies get very complicated, because we understand that there is no one size fits all policy. problems.”
She disagreed with Professor Lim’s suggestion that a minimum wage would have little impact on unemployment.
Gan said: “I disagree. I think that in the current times, where companies are being challenged and we are in a period of recession, there is a very real risk that if we introduced a universal minimum wage in all sectors, I think that many of our lower paid workers may lose their jobs.
“From low salaries, they become no salary. There are unintended consequences of some well-intentioned policies.”
Professor Lim agreed that implementing a minimum wage would not be ideal in an economic crisis, but suggested that the policy could be implemented “after the storm has passed.”
Other PAP MPs who questioned him were Mr. Zaqy Mohamad (Marsiling-Yew Tee GRC), Ms. Tin Pei Ling (MacPherson), Dr. Janil Puthucheary (Pasir Ris-Punggol GRC) and Mr. Sitoh Yih Pin (Potong Pasir).
Zaqy, who is Minister of State for Human Resources and Defense, said the key difference between PWM and a universal minimum wage is that PWM differs between sectors.
[[nid:500757]]He noted that he had previously announced in Parliament that there were plans to expand PWM without making it a “hard hitting tool” that applies to all sectors.
“There are different considerations and things that need to be resolved in all sectors, but it is not a new position. It is something we have been working on since 2012.”
Professor Lim responded that wage differentiation under the PWM could result in “substitution” between workers from different sectors with different minimum wages.
He said a universal minimum wage would prevent employers from “playing with the system.”
Tin asked if Professor Lim was suggesting that a minimum wage should be implemented, but withdrawn every time a crisis breaks out. He also asked what salary was paid to cleaners at Sengkang City Hall.
Professor Lim replied that a minimum wage is meant to provide a social safety net and that it would be wrong to “throw the rug under those workers” in times of crisis.
He said Sengkang’s team is still in the process of taking over the city hall and has not made any decisions on a minimum wage for its cleaners.
Ms Tin also asked if Professor Lim had specific proposals to improve youth employment in Singapore.
While Professor Lim explained the “cyclical” nature of youth employment, in which young people tend to delay their entry into the workforce to continue their education, Dr. Puthucheary interrupted him.
“They asked Mr. Jamus Lim a question. While I appreciate his erudition in economics and am learning a lot from him, he has not answered Ms. Tin’s question,” said Dr. Puthucheary.
“Ms. Tin asked if I had a youth job offer, not the principles on which you say that employment changes or does not change.”
Professor Lim replied: “We do not want to rule out … specific proposals to address youth unemployment at a time when we are in recession because we are not sure whether unemployment is justified or not. That is my reason for stating which context.”
He added that he did not have a specific policy in mind as he had not considered the matter.
Reprimand of the Speaker of the Chamber
Sitoh disagreed with Professor Lim’s comparison of the government’s use of reserves to invest in areas like education in the midst of an economic downturn with a household’s decision to re-rent their home while interest rates are low.
Professor Lim had said: “If I may argue, what we want is to make the best use of financial resources and not cling to a rigid ideology that we should never touch (the reserves).
“We are stewards, and as stewards we are responsible not only for ensuring that marijuana grows over time. We are also responsible for making the right financial decisions, which at certain times may involve expenses for higher investments (such as) education.
“These are things that we can really do better for in the future. We will be able to get higher tax revenue that will more than pay for the expenses we incur today.”
[[nid:500624]]Mr. Sitoh, an accountant, said he was “disturbed” by this argument.
“If I heard you correctly, you said that given the low interest rate, now is the time to re-mortgage your properties. As an accountant with more than three decades of experience, I can tell you that this is how people start to get into trouble. you’re not teaching that in your classes. “
He added that Singapore is one of the few countries in the world that has not had to borrow during the pandemic and that having savings “is not a sin.”
Mr Sitoh added: “He is always assuming that tomorrow will be better than today … He is assuming there is a better return, which may never come.”
Professor Lim replied that it was possible for a government to save excessively. He also said that he was not assuming there would be better returns in the future.
“I’m saying that if there are projects that give you better returns today, you should participate in them, replace the lower returns that are already locked in, for your ability to borrow at low interest rates … It is to recognize that there are projects of Higher performance today, unless you’re saying it’s not worth investing in today’s youth in Singapore. “
This prompted a reprimand from spokesperson Tan Chuan-Jin, who said: “I don’t think that was the point that was raised.”
This article was first published in The times of the strait. Permission is required for reproduction.
