On Wednesday (15 July), Worker’s Party (WP) Yee Jenn Jong took to his Facebook to respond regarding the public criticism towards the WP’s Jamus Lim’s claim on the policy of minimum wages.
In his post, Mr Yee questioned that Singaporeans are not prepared for the increasing cost from higher minimum wage, but are prepared for the raising of GST, which its impact on the cost of living will be far greater than setting a minimum wage.
“If Singaporeans complain that Jamus has misled that we did not say that Minimum Wage may lead to higher cost, I can guarantee that when our GST is raised to 9% (and it certainly will be raised because the PAP had already promised so if it gets the mandate), the costs of everything will immediately rise. The impact will be far greater than Minimum Wage. Singaporeans are prepared for 9% GST but not an increase in wages for the lowest 100,000 of income earners in Singapore?”
Mr Yee also noted that Singapore must be “more equitable” in treating the low wage workers if wanted to be called as First World Country, as he explained that the country’s share of GDP for workers is lower compared to other developed countries.
“If we call ourselves a First World country, we must be more equitable in the way we treat lower wage workers. Singapore’s share of GDP for wages is very low compared to other developed countries. During the TV debate, Jamus had unapologetically made our case to want to push for a higher share of GDP for workers, in line with that of developed countries,” he said.
On the Party’s policy of minimum wages, Mr Yee noted that WP would not apologies on the issue of minimum wages, which he claimed it has been stated in their previous General Election’s manifestos.
“The Workers’ Party makes no apologies for making our case for Minimum Wage, something that has been in our manifestos over multiple GEs already,” he wrote.
He said that the minimum wage is “budget neutral” and it will not impact the Government’s spending if the Government did not subsidise increase in costs or wages.
According to Mr Yee that cited the Economics’ pattern, the wages in a market driven model will be set depending the labours’ demand and supply.
“Theoretically, when the Minimum Wage is set at a higher price than where demand intersects with supply, then it will lead to a drop in quantity demanded and hence there will be some loss of jobs. How much the drop will be will depend on the elasticity of the demand curve,” he elaborated.
He went on to said, “In practice, in many countries where Minimum Wages have been established, there has not been significant job losses. It may lead to an increase in cost of services.”
While citing an article from The Straits Times, titled “8 in 10 Singaporeans willing to pay more for essential services”, Mr Yee said it is ironical that almost all of the 100,000 or so whose salaries fall below the WP’s recommended $1,300 take-home minimum wage are essential service providers.
Noting that the Government is also “not alien” to the minimum wage concept, he pointed out that the minimum wage has been practiced in selected industries via the Progressive Wage Model, which also “led to some increases in cost for certain services, for which Singaporeans had been prepared to pay for”.
“It might take a very long time for the government to move PWM to all sectors, so having a Minimum Wage is a good signal that we wish to leave no workers behind,” Mr Yee stressed.
Earlier on Tuesday (15 July), WP’s Member of Parliament-elect Jamus Lim posted on his Facebook to express his stance on the minimum wage policy.
The minimum wage policy, Dr Lim said it is a good start that is also evidence-based though it is not unabashedly good policy.
“In social sciences, there is seldom unambiguous evidence. Studies can yield different results, which is why continued research is important & policies should be based on the overall literature,” he added.
Taking the example in UK and US, Dr Lim said that almost all meta-analyses for these two countries “find little or no employment effects from minimum wages”.
“Of course, there are country-specific idiosyncrasies. That’s why before rolling out such a policy here, it is crucial that we have an evaluation framework in place, and an independent min wage-setting board, which can make on-the-fly adjustments in response to local conditions,” he noted.
Dr Lim also raised concern about who will pay for the minimum wage.
He said, “Some people think this would cost the government. Actually, most min wage models have no fiscal impact, and the burden is borne mostly by higher prices consumers pay (3/4), and in part by firms (1/4).”
He then continued, “I see this as a feature, not a bug. The point is to redistribute some bargaining power from capital to labor, and I think we can afford to chip in a little to take care of the least well-off in society. With many more buyers than min wage workers, the price effect will be small.”
In the WP’s manifesto for General Election 2020, the Party has called for the national minimum wage of S$1,300 per month for full-time work and pro-rated for part-time work, so as to help the lower income Singaporeans meet their basic needs.
