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SINGAPORE – The Workers’ Party’s proposal for a universal minimum wage could leave workers and businesses in a worse situation, and the exercise to determine the wage level turns into a political auction, it said on Thursday (October 15) NTUC Deputy Secretary General Koh Poh Koon.
He added that government policies, particularly the Progressive Wage Model (PWM) that is mandatory for the cleaning, security, and landscaping sectors, already ensure that the vast majority of low-wage workers here bring home more than $ 1,300 a year. month, with data from over the years indicate that it has also raised the wages of these workers in other sectors.
His comments in Parliament, during the debate on the Government’s strategy to emerge stronger from the Covid-19 pandemic, come amid a growing discussion about the minimum wage, with the WP calling for a universal minimum wage of $ 1,300 in all sectors.
Dr. Koh’s comments generated rebuttals from WP chief and opposition leader Pritam Singh and MPs Leon Perera (Aljunied GRC) and Jamus Lim (Sengkang GRC), with MPs from the Popular Action Party Edward Chia (Holland-Bukit Timah GRC) and Carrie Tan (Nee Pronto GRC) will also join the discussion.
A universal minimum wage had been a key proposal in the WP election manifesto for the July 10 general election.
Wage fixing as a “political contest”
Addressing the WP proposal, Dr Koh, who is also Minister of State for Health, said that while a single minimum wage is “apparently a quick way to increase workers’ wages,” such a policy will also have drawbacks, like all policies do.
First, there is the danger of inadvertently putting workers at a disadvantage if wages do not reflect the realities of each sector and are not sustainable or generate unwanted costs.
He said setting a salary level that is suitable for, say, cleaners and clerical staff alike will be difficult, as each sector will have a different profile of low-wage workers and different concerns.
Meanwhile, an arbitrarily prescribed wage level is likely not high enough to benefit all workers, or so high that companies in some sectors return costs to consumers, reduce hiring, or cut back, he added.
Without a proper basis for determining salary, another danger is the inevitable politicization of the exercise, he said.
Singh had said in a Facebook post on Monday that a universal minimum wage is a “moral imperative” and an “act of national solidarity.”
Referring to this, Dr. Koh said: “In a political contest, one political party will surely come along and say, well, $ 1,500 will reflect higher ‘moral imperatives.’ Yet another will come and say that $ 1,300 is good, $ 1,500 is better, but $ 1,700 must surely be more divine, more imperative. It can become a political auction. “
He warned of a process that is gathering momentum and distancing itself from market realities, saying that the minimum wage would rise beyond what companies can afford and would jeopardize the jobs of low-wage workers, as has happened in others. countries.
In response, Mr. Singh and Associate Professor Lim said that this could be avoided if the minimum wage was set by an independent panel and also based on statistics such as average household spending on basic needs.
Another complication is whether a minimum wage introduced here should cover migrant workers such as foreign domestic workers, Dr. Koh said, noting that there is an online petition “in honor of Mr. Singh’s name” calling for this.
“If a minimum wage is driven simply by a ‘moral imperative,’ then the natural question is whether it should include non-Singaporeans as migrant workers, including our foreign domestic workers,” added Dr. Koh.
“Now if companies cannot bear the resulting costs, is it also a moral imperative to help our SMEs? This is a relevant popular consideration at this time, when we are in a deep Covid-19 crisis. Many companies, especially our SMEs, like those in the construction sector, are suffering and are not entirely out of danger. “
Dr Koh suggested that introducing a minimum wage now was inconsistent with what WP MPs have been saying about helping SMEs in the midst of recession, and would be akin to adding “more frost to the snow at companies that are in the dead of winter right now. “
He said: “So, I’m not so concerned about what Mr. Singh and the WP are proposing for now, but about what it portends for the future: the possibility of a political auction that values the less skilled workers, our brothers.” . and sisters, and putting our smallest companies, our smallest SMEs, at a disadvantage. “
While more can and should be done to help the lowest paid in Singapore, he added, “the cure must be no worse than the problem it is trying to solve.”
The progressive salary model has worked
Stating that the government is not ideologically against having a minimum wage, Dr. Koh said that the PWM was effectively a minimum wage tied to a skills scale and takes a different approach to raising incomes for low-wage workers. .
He noted that under PWM, the government can work with each industry to address their specific concerns and challenges, in order to reach a consensus and a foundation that different stakeholders can support.
With so many parties involved, a political auction is much less likely to occur, he added.
Addressing criticism that the PWM covers only the cleaning, security and landscaping sectors and not all low-wage workers, Dr. Koh said that the Government has committed to working with its tripartite partners to extend the PWM to all sectors. He added that PWM has also helped raise wages in other sectors.
Among the 850,000 workers in occupations traditionally considered lower-income, such as clerical support, service personnel, and merchants, among others, the vast majority earn more than $ 1,300 a month, Dr. Koh said.
Figures from the Ministry of Manpower show that around 100,000 workers earn less than $ 1,300, and after taking into account salary supplements from the Workfare Income Supplement, this number drops to 32,000.
Noting that this equates to roughly 1.7 percent of the local workforce, Dr. Koh added, “What the WP wants to achieve with the proposed $ 1,300 minimum wage, we have already achieved through PWM, Workfare and other political measures “.
To this, Singh said that since the number was small, it shouldn’t be too difficult to ensure that these Singaporeans receive a living wage of at least $ 1,300.
He added: “I would be willing to work with the Senior Minister of State to make sure that we can reach these Singaporeans as quickly as the Government can, because I don’t think it is acceptable for any Singaporeans to win below this number.” It’s just not acceptable and if we can do something about it in twice the time, let’s do it. “
Perera added that implementing a minimum wage for such a small number of people is unlikely to hurt SMEs.
Expanding PWM
Dr. Koh said the latest move to convene a working group on PWM expansion will further reduce this number.
He added that the NTUC had also submitted a proposal to the Government to form a Tripartite Group for the Waste Management Industry to introduce a PWM focusing on the waste collection subsectors.
He also suggested the creation of a sectoral wage benchmark for sectors where there are currently no regulatory levers to require a PWM, as a first step towards creating greater awareness of wages in these sectors, and urged the Government to consider the use of regulatory levers to encourage firms to join the voluntary PWM Brand scheme, which recognizes firms that pay progressive wages.
“We must recognize what the Government and tripartite partners have accomplished in providing a genuine boost to the workforce, especially our low-wage workers, and be willing to take new approaches,” he said, adding that the Government remains open to new ideas. .
Noting that a central mission of the Popular Action Party government has always been to lift up low-income Singaporeans, he said: “Taking care of our workers has been a fundamental part of our DNA. As a party, we have achieved what few have achieved in the last six decades, but the task is never finished. It is something we must and will continue to work on. “
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