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SINGAPORE: The Workers’ Party (WP) proposal for a minimum wage could leave companies and workers worse off and also become a politicized issue, said Deputy Secretary-General of the National Trade Union Congress Koh Poh Koon , in Parliament on Thursday (October 15).
The minimum wage issue has been in the spotlight since the July general election.
On Monday, WP chief and opposition leader Pritam Singh called for a universal minimum wage of S $ 1,300 as a base for Singaporean workers, saying in a Facebook post that this is not just a “moral imperative. “but” an act of national solidarity. ” “.
READ: Universal minimum wage of S $ 1,300 could be considered ‘parallel’ to ‘minimum wage plus’ approach: Pritam Singh
During Thursday’s debate on Deputy Prime Minister Heng Swee Keat’s ministerial statement on the government’s strategies to emerge stronger from the COVID-19 crisis, Dr. Koh said initiatives such as the Progressive Wage Model have already helped raise wages. of lower-income workers.
Dr. Koh’s speech got a response from Mr. Singh and other WP MPs, and MPs from the Popular Action Party (PAP) also rose to speak.
THE MINIMUM WAGE CAN BECOME A “POLITICAL AUCTION”: DR KOH
Dr. Koh, MP from Tampines GRC, presented three arguments in his speech: that a minimum wage could leave the least skilled and most vulnerable workers at a disadvantage, as it is difficult to find the correct value; that it could become a political tool; and that it questions whether it should apply to the population of migrant workers who make up more than 1.3 million people in the workforce.
Too low an amount “defeats the purpose of having a minimum wage,” he said of the difficulties in setting the proper minimum wage. Too high, and some businesses won’t be able to afford it, causing them to close, lay off workers, or pass the cost on to consumers.
“This is a particularly pertinent consideration at this time when we are in a deep COVID-19 crisis. Many companies, especially SMEs (small and medium-sized companies), such as those in the construction sector, are suffering and are not entirely out of the woods, “he added.
Dr. Koh also questioned Mr. Singh’s comments about having a universal minimum wage as a “moral imperative.”
“Today, let’s say we can all agree to the WP’s proposed S $ 1,300 minimum wage, a ‘moral imperative,’ as Singh puts it in his recent Facebook post. But what next? What happens next How will this issue change from this year to the next, and on what basis? “said Dr. Koh, who is also Minister of State for Health.
“In a political contest, a political party is sure to come and say, well, S $ 1,500 will reflect a higher ‘moral imperative’. Yet another will come and say, S $ 1,300 is good, S $ 1,500 is better, but S $ 1,700 surely must be a more divine “moral imperative.” It can become a political auction. “
EFFORTS TO INCREASE WAGES
Instead, Dr. Koh emphasized the benefits of Singapore’s model of helping low-wage workers, a combination of the Progressive Wage Model (PWM), Workfare Income Supplement (WIS) scheme, and training programs, saying that helps improve low-wage workers without putting their jobs at risk or significantly raising consumer prices
PWM, for example, allows workers to increase their productivity, paving a path toward promotion and higher wages, he said, noting that it will eventually spread to all sectors.
LISTEN: Increasing Wages for Singapore’s Poorest: A Closer Look at the Progressive Wage Model
“Workfare is another significant intervention. It acts as a form of negative income tax: the government supplements the income of workers who earn less than S $ 2,300 per month,” he added.
Dr. Koh said there are about 850,000 workers in occupations traditionally considered low-income, such as service personnel, cleaners and clerks. The “vast majority” of them earn more than S $ 1,300 per month.
Cleaner dishes as people dine at a street vendor center in Singapore as the city state reopens the economy amid the coronavirus disease (COVID-19) outbreak, June 19, 2020. REUTERS / Edgar Su
About 100,000 make less than S $ 1,300, including a quarter who are self-employed and would not benefit from a minimum wage, he said.
With Workfare outlays and employer contributions to the Central Provident Fund, 56,000 earn less than S $ 1,300.
Of the 56,000 workers, 32,000, or 1.7 percent 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.”
HELPING 32,000 WORKERS
Mr. Singh first responded to Dr. Koh’s arguments by stressing that his concern is not about the PWM, but why the government is taking so long to cover these low-wage workers.
“Can’t we consider how we can cover them now right away because it’s not a small number?”
“If you think of HDB’s 60,000 available rental units and compare it to this number … many Singaporeans need help.”
READ: Why in a cheap food haven, some Singaporeans still go hungry?
“I don’t think it is acceptable for anyone, any Singaporean, to win below this number. It’s just not acceptable, ”he said.
As for curbing any kind of politicization of the minimum wage, Singh said the sum could be left to a panel of experts or the National Wages Council to decide, based on statistics such as average household spending on basic needs.
He added that his party’s minimum wage proposal does not include foreign labor, as they are governed by other regulations.
Singh also said he is concerned that some sectors will benefit from the benefits of PWM, by pricing in pay increases even before it has been implemented in their industry. He gave the example of the renewal of lift contracts in his constituency, where some companies have increased the cost of their bids by between 5 and 47 percent.
“If all this increase goes to the Singapore worker, then I am prepared to shoulder that burden to persuade the residents of our city council that we need to increase S&CC (Service and Conservation Charges),” he said. “But my question is, is it a realistic cost increase?”
In response, Dr. Koh said that the government already convenes its tripartite partners (government officials, union representatives and employers) to study the data.
“The reams and the research are good, but in practice, it’s always more difficult to do, because there are practical considerations, there are setbacks,” he said.
READ: Comment: Singapore’s poorest earners will benefit from the expansion of the progressive wage model, but some conditions must be met
“That is why when we work on a negotiated result, there is always that balance that can be achieved, where companies are prepared to absorb the cost. If not, they have a way of rationalizing how to pass the cost on to consumers, ”added Dr. Koh.
To “go against the norm” and implement a minimum wage that excludes foreign labor, when in most developed countries the policy applies to them, there must be a “really strong justification” for doing so, he said.
In response to Mr. Singh’s concern about companies taking advantage of PWM, Dr. Koh said that since the scheme is tied to a skill scale, any cost increases can be compared to his skill level. Municipalities must also have an adequate bid evaluation process.
As for how long it will take to help the 32,000 workers, Dr. Koh said: “I think the process will be something we want to do now, talk about it, discuss it, come up with some blueprints, but when can we implement it? ? Obviously, we also have to consider the economic situation, because this is probably not the right time to push for higher wage costs for our SMEs, which are already suffering. ”
A ‘CENTRAL BANK’ FOR A MINIMUM WAGE?
Other WP MPs also joined the debate. Associate Professor Jamus Lim said that the studies that the minimum wage does not lead to an “appreciable increase” in unemployment were conducted with care and not just belief.
Sengkang’s deputy added that the politicization problem can be solved by convening an independent salary board to set the minimum wage, just as the central banks that set interest rates are independent from the government.
When Dr. Koh mentioned that people with disabilities make up part of the 1.7 percent and therefore should be helped by other means rather than putting the burden on their employer, Assoc Prof Lim called it an argument of ” straw man”.
READ: Government Accepts Recommendations for a Progressive Salary Model, Clearer Career Paths for the Elevator Industry
WP Aljunied GRC deputy Leon Perera asked why the minimum wage and not the PWM would be politicized, to which Dr. Koh replied that it is decided by a tripartite group and not a party.
Perera also asked why helping raise wages for 32,000 people would hurt small businesses if it is a fraction of workers, especially when news reports have shown that many business owners are open to a minimum wage.
Towards the end of the debate, Holland-Bukit PAP MP Timah Edward Chia, who is the managing director of the food and beverage company Timbre Group, chimed in to say that companies must remain competitive and, to do so, must go accompanied by an increase in productivity.
Mr. Singh then asked, “I would like to ask the member in return, if he agrees to pay the… 32,000 workers S $ 1,300 as a commercial employer. Are you ready to do that? I hope it is. ”
Mr. Chia responded that a business owner is not accountable to a specific group of employees, but to the entire business. Improving worker productivity, which is part of the PWM strategy, is key.
READ: IN FOCUS: The wage debate: how to raise the wages of those who earn less?
“(An) arbitrary minimum wage can actually be more negative for a company. We need to see it as a holistic approach, that helps companies train their employees, ”he said.
Dr. Koh reinforced the productivity aspect of the PWM in his last answer in the debate, saying that a worker’s salary increase has to be justified by an improvement in their skills.
“The problem is a minimum wage, it is that it is not connected to any skill ladder. It’s a number, ”he said.
In his speech, Dr. Koh acknowledged that much work remains to be done to help more workers with lower wages.
“Achieving social equality and enabling low-income families to improve their lives is never an easy task. There is no silver bullet,” he said.
“It is also an ongoing job. The NTUC and the tripartite partners will focus on the real hard work of raising the wages of the lowest paid workers and will seek public support for our workers while they hope to avoid all potential downsides.”
