Pritam Singh: It’s useful to hear employers’ view on raising low-wage workers’ income

The naysayers on social media said helping the low-income Singaporeans through higher wages will result in numerous negative outcomes for business and the low-income group, but it’s important to hear from the employers too, said Leader of the opposition, Pritam Singh, as he cited The Business Times’ article on his Facebook page on Tuesday (15 Sept).

The Business Times has gathered views from the various business leaders on whether they would support the moves to uplift lower-wage workers despite the measures could incur higher costs for their organisation.

Referring to the article, Mr Singh noted that “these are employers that deserve to be encouraged, supported and championed”.

“Some employers come across as far more enlightened – in my view – almost intuitively aware that Singapore society and our sense of rootedness as a people is on very shaky grounds if we ignore the well-being of the low-income amongst us,” he added.

“Raising the wages of the lowest-paid is the simplest way to increase the size of the middle class”

John Bittleston, the founder and executive chairman of Terrific Mentors International Pte Ltd noted that he agrees with the idea to uplift lower-wage workers due to three reasons.

The first reason that he highlighted was social stability, which he said is demanding for solutions as the “authority everywhere is being challenged on the grounds of its competence, risks and rewards”.

While his second reason emphasized on society’s economic growth.

“Raising the wages of the lowest paid is the simplest and quickest way to increase the size of the middle class. Such an increase is desirable for society’s economic growth, we need this as we struggle to recover from COVID-19,” Mr Bittleston told The Business Times.

He added that Singapore cannot afford to have “spurious reasons for social injustice”.

“Social fairness is well explored in a world of high tech communications. We can no longer have spurious reasons for social injustice. They have been seen through.

“As an organisation, we already increased lower-paid workers’ rewards. The money for doing so comes out of our profits. We are content that it should do so,” said Mr Bittleston.

“A minimum wage will only lead to a decrease in local jobs”

The CEO and founder of Black Marketing, Chris J Reed, opposed the idea of setting a minimum wage for employees, noting that it could cause local jobs to plummet.

“No, it is self-defeating and will lead to an increase in companies outsourcing work to other countries from the Philippines to Vietnam, South Africa to Latin America,” he remarked.

Mr Reed stressed that business leaders in Singapore are no longer in a local or regional marketplace, but in a global marketplace.

“If you can do remote working for 75 per cent of jobs, that means you can employ anyone, anywhere to do that job. They do not need to be in Singapore and no law will prevent that,” Mr Reed told The Business Times.

That said, setting a minimum wage for employees will only lead to a decrease in local jobs.

“A minimum wage will only lead to a decrease in local jobs, not increase. CEOs are thinking global: are the Government MPs?” he asked.

“A nationwide net on minimum wage may lead to unwanted outcomes, like price hikes”

As much as organisations will have to pay for the increase in wages, at the end of the day, the cost will trickle down to the common man, said the founder and CEO of Del Holdings Pte Ltd, Jay Varman.

Mr Varman acknowledges that companies should look into raising wages, and supports the Ministry of Manpower’s (MOM) Progressive Wage Model (PWM) that aims to increase workers’ wages through upgrading skills and improving productivity.

But precaution needs to be taken when it comes to setting minimum benchmarks, he said.

“A nationwide net on minimum wage may lead to other unwanted outcomes. Such as higher bus fares or maintenance fees.”

Noting that people will see an increase in the cost of goods, including food and water, he asked: “Are we ready to accept these price hikes?”

“We need to ensure that low-wage workers can cope with Singapore’s rising cost of living”

The chief executive officer of AAM Advisory, Eryk Lee, seems to have a similar opinion as to Mr Varman’s.

Mr Lee pointed out that the Government need to ensure that low-wage workers can cope with the rising cost of living in Singapore.

Citing the Mercer’s surveys in 2019, he noted that the city-state reportedly has one of the highest quality of living in the Asia Pacific and it was listed as one of the countries with the highest cost of living.

Nevertheless, Mr Lee expressed his full supports towards improving the lives of Singaporeans.

“I am fully supportive of efforts to improve the lives of everyone living in Singapore. If that means a minimum wage is needed, we should find ways to support it to help ensure that everyone is able to provide for their families and meet basic needs.

“Doing so will also help Singapore to continue to enjoy political stability and continue to be one of the safest cities in the world,” he told The Business Times.

“Legislative changes raising the minimum wage pose challenges”

Dr Maren Schweizer, the director of Schweizer World Pte Ltd, noted that companies must be given “enough lead time” to address the impact of raising the minimum wage, in order to remain “competitive and thrive in such a new environment”.

She added that companies can analyse the effects by proactively engaging in a thorough analysis of their business operations.

“Legislative changes raising the minimum wage pose challenges,” Dr Maren remarked.

She explained that raising wages “will be challenging for companies to pass on to customers and consumers in the short term, placing strain on profitability”.

“This strain might be exacerbated by the potential increase of input costs as suppliers seek to recoup their increased wage costs. Productivity increases will be a must for businesses.

“In the digital age, offshoring of data-driven business processes is a viable short-term option and a downside risk for the community.”

Dr Maren concluded that the Government need to consider various scenarios and the impact towards its finances, adding that “minimum wages should aim to address and eliminate gender gaps”.

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