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Parliament reviewed the question of how best to help raise wages for low-income workers, with several MPs from the People’s Action Party (PAP) lobbying Workers Party (WP) MP Jamus Lim (Sengkang GRC) to Get details on your call for a minimum wage. here.
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 ” 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.
After questioning other MPs, 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, adding that he was simply offering suggestions for further consideration and study.
JAMUS LIM GRANTS THE “NOT IDEAL” MINIMUM WAGE DURING THE RECESSION
Ms Gan Siow Huang (Marymount), who is Minister of State for Manpower and Education, 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 that addresses all problems “.
She disagreed with Professor Lim’s suggestion that a minimum wage would have little impact on unemployment.
She said: “I beg to differ. I think in the current times, when companies are being challenged and we are in a period of recession, there is a very real risk that if we were to introduce a universal minimum wage in all sectors, I think a lot of our lower paid workers can lose their jobs. From low pay, they go back without pay. 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), Mr. Vikram Nair (Sembawang 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.
He noted that he had previously announced in Parliament 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,” he added.
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.”
WP MP Leon Perera (Aljunied GRC) later got up to ask Mr. Zaqy how the Government would respond to people who earn less than $ 1,300 in average household expenses on basic needs and who are not included in the PWM.
“Should this group wait until the PWM arrives? How long will that take?” I ask.
VIKRAM NAIR: WHAT IS THE APPROPRIATE MINIMUM WAGE FOR SINGAPORE?
Mr. Nair 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.”
Mr. Perera also addressed 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 to its minimum wage policy.
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 had also asked if Professor Lim had specific proposals to improve youth employment in Singapore, although this was not an issue he brought up in his speech.
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. Although I appreciate his erudition in economics and am learning a lot from him, he has not answered Ms. Tin’s question,” he said.
“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 implement … 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 in detail.
SITOH YIH PIN ON THE USE OF NATIONAL RESERVATIONS
Sitoh disagreed with Professor Lim’s comparison of the government’s use of reserves to invest in areas such as education in the midst of an economic downturn with a household’s decision to re-rent their home as interest rates they 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 the boat grows over time. We are also responsible for making the right financial decisions, which at times may involve spending on higher investment items (like) 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.”
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.”
Professor Lim responded that he used the mortgage analogy to show that there are cases where borrowing at low interest rates to invest in something that offers higher returns “is not only financially prudent, it will actually be better for your balance sheet. long term”.
To this, Mr. Sitoh said: “He is always assuming that tomorrow will be better than today … He is assuming that 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.”
THARMAN: DON’T PARTICIPATE IN STRAW ARGUMENTS
Tharman also rose to join the debate although, he said, he “had no intention of speaking.”
Responding to Professor Lim’s view that Singapore “should no longer privilege efficiency at the expense of fairness,” he advised against making straw man arguments, such as saying that the government is only interested in efficiency, not efficiency. equity.
“That is frankly laughable,” said Mr. Tharman, who is the Coordinating Minister for Social Policies. “Try to avoid that way of arguing, of painting everything in binary terms.”
He also responded to Professor Lim’s quote from a study on low-wage work, which he attributed to the National University of Singapore. He said: “I have never heard economists cite a university as a source of research, whether it is a well regarded or not very well regarded university. People do research and it can be very credible research, but universities do not publish research.”
Professor Lim said he did not think he was making a straw man argument when he spoke of a trade-off between efficiency and fairness.
“I am not suggesting that all the policies that currently exist are only geared towards efficiency, and in the same way, I am not suggesting that all the policies that I have presented in my speech and elsewhere are only geared towards equity,” he said. . .
“Rather, it is a continuum, and I am arguing that we can go further in the direction of favoring equity over efficiency.”
Point and counterpoint
Gan siow huang
In today’s times, where businesses are being challenged and we are in a recessionary period, there is a very real risk that if we were to introduce the minimum wage, a universal minimum wage in all sectors, many of our lower-wage workers could lose your salary. jobs. And from ‘low salary’, they become ‘no salary’.
Jamus Lim
There is no doubt that, at this very moment, such a policy is not ideal. But let’s come together and agree that this is a principle that we want to implement so that when we put these plans in place after the storm has passed, we can easily carry them out.
Vikram nair
What is the minimum wage level proposed by the member?
Jamus Lim
What is the appropriate level of the minimum wage? It should be clear. I do not know. And that is exactly why what we need is a national commission to understand this and study it.
Janil Puthucheary
While I appreciate his erudition in economics and am learning a lot from him, he has not answered Ms Tin Pei Ling’s question. Ms. Tin asked if he had a youth job proposition, not the principles on which he says employment changes or does not change.
Jamus Lim
Fair enough, yes, but the reason that context is important is because we do not want to launch specific proposals to tackle youth unemployment at a time when we are in recession because we are not sure whether unemployment is justified or not … I don’t have a specific policy in mind because I haven’t thought about it.
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