Below is an excerpt from an article taken from blog Diary of A Singaporean Mind.
It was reported in the papers today that: MPs debated the minimum wage for 5 hours yesterday in parliament.
“Almost all who spoke on the topic argued that it would do more harm than good; by diminishing the economy’s competitiveness, they said, the measure would lead to unemployment for the very workers it intended to help” – ST 13 Jan 2011
Lets put things in perspective. This is the same parliament that debated and supported the idea that our political leaders should be paid the highest salaries in the world. Yesterday, the same parliament got together to run down the idea of minimum wages – paying workers a decent wage for their work.
The economic tradeoffs of implementing minimum wages are actually not so large provided certain pre-requisites are in place. These include having a not so large income gap, low cost of living and an economy that is not so dependent on cheap labor. When you have these in place, setting a minimum wage is just a formal step to put in place legislation to ensure a small number at the margin are not exploited and once minimum wage legislation is in place it serves as a back stop to prevent govt from taking easy solutions such as depressing wages to attract industries dependent on low wages just to keep employment down and a minimum wage will motivate businesses to invest and improve productivity. Minimum wage will also motivate govts to keep other business costs such as rent, utilities and transport low so that businesses can remain competitive.
“None of the MPs who spoke advocated that Singapore should implement a minimum wage now” – ST 13 Jan 2011
You may read the rest of the article here.