Yes, and if you can pay people $100 or nothing, unemployment drops to zero but what is the point of keeping people in low wage work to keep unemployment low? So they can work their whole lives, collect workfare and live out a life just above subsistence. Not very Swiss standard of living right?
With a worldclass govt paid the highest salaries in the world, we would like to have our cake and eat it = low unemployment and decent wages....at least we want leaders who will try to achieve this as a goal otherwise how else do we narrow the income gap and inequalities in our society. Why is the PAP govt insistent that it is not do-able when so many other countries have done it. In fact all developed countries have minimum wage policies and even our neighbor, Malaysia, is seriously considering it.
Minimum wage an 'easy solution', says Swee Say
But doing so would lead to firms moving to places with cheaper labour, he says
By Kor Kian Beng
LOW WAGE OR NO WAGE
LABOUR chief Lim Swee Say said yesterday that advocates who want a minimum wage as a way to improve the lot of low-paid workers were opting for an 'easy solution'.
Taking such an step would, instead, lead to higher unemployment rates as companies start moving to more cost-competitive locations, he argued.
'Yes, we can try to reduce the number of low-wage workers by having a minimum wage, but the number of workers with no wage will go up and unemployment will go up,' he said during a panel discussion at a conference to explore ways Asian companies can better attract and groom talent.
It would be more effective to introduce a 'minimum skills' system for jobs and raise the skills level over time through education and training, said Mr Lim, who is also Minister in the Prime Minister's Office. 'That way, lower-wage workers of today will become better-skilled workers and earn better wages of tomorrow.'
Mr Lim's first public comments on the issue follow a debate last month on the effectiveness of a minimum wage as a way to protect low-wage workers here and boost their incomes.
Making a case for such a move were National University of Singapore labour economist Hui Weng Tat and Ambassador-at-Large Tommy Koh.
Dr Hui argued that an influx of low-skilled and low-cost foreign labour keeps the wages of lower-skilled workers here stagnant. He believed a minimum wage would encourage bosses to invest more in technology so as to raise productivity.
Professor Koh noted the Government's argument to let the market regulate wages, but said the state should intervene to 'make the world a fairer one' when there is a market failure.
Yesterday, Mr Lim noted that some economies went for easy solutions such as a minimum wage and the restriction of foreign labour supply - thus forcing firms to take on local workers even though there may be a mismatch in the skills level for jobs.
'We can force the mismatch onto companies and force them to pay higher wages,' he said. 'But you can't stop the globalisation of jobs (and) the harder you push, eventually the jobs will go away because if a location is not competitive, they can always go (elsewhere).'
Mr Lim spoke on the issue at the Singapore Human Capital Summit during a panel discussion on the human capital challenges facing Asia in 2020.
Challenges he named include a widening income gap, keener competition for top talent, and a growing mismatch between jobs and skills.
Countries should focus on developing their prime asset - their people - and use this to attract investments and jobs, Mr Lim said. They could do so by beefing up the education and skills upgrading system, keeping foreign manpower supply open, and maintaining social stability by looking at narrowing the income gap.
On the issue of social stability, panellist Lynda Gratton, a London Business School professor, said companies had to stop paying top executives '500 times' more than their lowest-paid employees. This would build fairer societies.
Citing the example of a firm that pays its top management 20 per cent more than its lowest-paid workers, she asked Mr Lim if more companies would do so in future.
Mr Lim's response was that in the real world, top dollar would have to be paid for top talent.
The labour movement does not object to people getting higher pay, he said. But it expects bosses to be more responsible to their rank-and-file workers by ensuring that they too receive a fair wage for the work they put in.