Your feedback is important to us Tell us what you think. Email us at btuserfeedback sph. Minister of State for Manpower and Education Gan Siow Huang, for instance, warned that having a minimum wage would result in low-wage workers losing jobs instead. Senior Minister Tharman Shanmugaratnam pointed to the existing Progressive Wage Model PWMwith its differentiated approach that allows policymakers to set a "minimum rung" at an appropriate level for each sector.
Why is it so hard to lay the topic to rest?
The main theoretical argument against a minimum wage is simple: if a minimum wage is set above the quick small wages wage - which it would have to be, to make a difference - then firms would hire fewer workers and unemployment would rise.
But the devil is in the empirical details. The unemployment argument assumes, quick small wages a start, that existing wage levels reflect how much employers can truly afford to pay. If employers have a lot of wage-setting power to begin with, this may not be true. Of course, studies in other countries - with their own circumstances, demographics, and market structure - may not be applicable to Singapore.
Yet the argument is not that the theoretical objection never holds, just that it may not necessarily do so.
This leaves room to argue that Singapore might be able to make it work. Steps and ladders Granted, the unemployment objection is not the only one that has been raised.
Since Singapore's PWM was announced in and implemented in the ensuing years, the government has pointed to it as a better alternative to a national minimum wage. Shortly before the election, Mr Tharman himself made this point in a talk show.
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The PWM "can put everyone on a ladder of skills and wages", he said: "It is better than a minimum wage, which is only the first step. We have considered it before.
The PWM has been implemented for three sectors so far: cleaning, security, and landscape. Developed by tripartite committees for each sector, it sets out career ladders for workers, with corresponding wage floors for each rung. Compliance with the PWM is mandatory in each sector, enforced via registration or licensing requirements. Mrs Teo noted that in the last five years, workers in the three PWM sectors saw cumulative wage growth of around 30 per cent, compared to 21 per cent for the median worker.
In setting out wage ladders rather than a single wage floor, the PWM by definition goes further than a standard minimum wage. Yet one obvious difference is its scope quick small wages coverage. Given the detailed wage ladders of each PWM, with qualifications and years of experience, much auditing would be needed to ensure that firms comply. The large quick small wages of resources needed also makes it inefficient, adds Prof Hui. Even if one rejects the charge of ineffectiveness, the larger point remains: that the PWM does not and may not be able to cover all sectors.
Existing licensing requirements are also a prerequisite if the PWM is to be enforced. The simplicity of a national minimum wage is its quick small wages advantage, says Mr Huang: both in the ease of communicating it to the public, and in administering it. And while a minimum wage can be based on considerations such as household spending needs, the specificity of the PWM requires wage quick small wages to be set accurately, "without distorting market premiums for different job levels".
Ross School of Business. But a worker gains from the PWM only by staying with the same sector and employer, and doing "higher-value" work there.
There is also the danger that the PWM's detailed conditions could "turn into loopholes that employers use to retain workers on the lowest rung of wages", said the WP's Dr Lim in Parliament on Thursday. Minimum reasons Apart from its relative simplicity, the arguments in favour of a minimum wage are not too different from the arguments for the PWM itself. First, a minimum wage spurs firms to improve productivity and take a labour-light approach. A minimum wage provides bottom-line impetus for such moves.
As Prof Hui puts it: "The strongest reason for a minimum wage is to provide the much-needed incentive and impetus for companies to move away from the heavy dependence on large numbers of low wage foreign labour, and remove the inherent obstacles to a much-needed restructuring of the Singapore economy with greater dependence on advanced technological solutions for production quick small wages utilisation of services.
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Defenders of the status quo might point to the existing Workfare Income Supplement scheme, which tops up the earnings of low-wage workers. But such a wage subsidy programme can certainly co-exist with a minimum wage, says Mr Huang: "Think of minimum wages and wage subsidies working together to push and pull them up respectively, meaning they are complementary and not substitutes. The PWM does not achieve this effect, as it applies only to citizens and permanent residents, notes Prof Lim.
Yet this apparent advantage might be an obstacle instead.
Prof Leung views a "heavy reliance on foreign workers for low-wage jobs" as the strongest reason that a minimum wage might be unsuitable for Singapore. If much of the benefits accrue to foreign workers, the associated costs might be harder to stomach.
Though the welfare quick small wages low-wage migrant workers has gained attention and sympathy in recent years, it remains a contentious political issue. Nor is the solution simply to exclude foreign workers from a national minimum wage. That would have distortionary effects, and possibly invite criticism. Says Quick small wages Huang: "A disparity here between locals and foreign workers may raise questions on human rights and equality by international organisations such as the International Monetary Fund for its Article IV consultations and the United Nations in its periodic reviews.
If neither quick small wages unemployment argument nor the PWM's existence suffices to end the debate, there is still an argument in favour of shelving the discussion for now: the fact that Singapore is in the throes of what might be a prolonged recession.
Given a minimum wage that prevents employers from cutting wages below that level, employers might prefer to lay workers off to weather the recession, if they are free to do so, says Prof Ko. With wages already declining during a recession, a minimum wage would become "more binding and more likely to generate disemployment effects", says Prof Leung, noting that some studies do suggest that a minimum wage has a larger disemployment effect in a recession.
Some countries might, for instance, delay an increase in an existing minimum wage during a recession.
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But a recession is not, in itself, a reason for not having a minimum wage - though it may affect the level at which the wage is set, and the timing of any increase, she adds. In other words, the question of timing - while relevant in terms of implementation - might be beside the point.
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The fundamental reasons for having or not having a minimum wage ought to hold true throughout the economic cycle. As the WP's Dr Lim said in response to his PAP interlocutors, it is possible to discuss and agree upon the principle of having a minimum wage, which might then be rolled out "after the storm has passed", quick small wages the current moment is not ideal.
Singapore Business Federation SBF chief executive officer Ho Meng Kit noted on Friday that the business community is likely to remain divided on the issue; that some quick small wages will support it, as they are also in other markets with minimum wage requirements, while others will be alarmed.
Ultimately, whether to have a minimum wage is not "a technical question to be answered by economists" but "a moral trade-off to be considered by everyone", concludes Binary options demo account withdrawal Ko.
The PWM, for its part, seems to be premised upon an idea of "fairness" in relation to skills, he added: Everyone is paid a minimum, but if you have more skills, you should be paid more.
If anything, the current Covid recession might strengthen the moral imperative of fair wages, argues Prof Hui: "The experience of the pandemic has helped us realised the importance and true social value of some of the low-paid jobs in essential services. With the current economic disruption pushing companies to innovate and restructure, a minimum wage could itself be "a safer and fairer quick small wages pandemic world that provides decent living standards for all employees". SBF's Mr Ho said: "We believe the discussion on minimum wage should not just be a cost and benefit issue for businesses.
It should also be approached if companies have a sense of social justice how to reward their workers for decent work.