The Singapore Democratic Party (SDP) has proposed a monthly minimum wage of S$1,760 following its policy team’s most recent review of its minimum wage proposal.
This will work out to a minimum wage of S$10 per hour and is calculated based on a 44-hour workweek.
SDP in a statement on Friday (30 October) said that setting a wage floor will protect workers from “unduly low pay”.
The party also proposed coupling the minimum wage with pro-employment policies and social transfers that will better enable low-income workers to obtain a dignified living standard.
Citing research done by Assistant Professor Ng Kok Hoe from the National University of Singapore (NUS)’s Lee Kuan Yew School of Public Policy (LKYPP), SDP said that the proposed minimum wage of S$1,760 would “commensurate with” the amount required for a person aged 55-64 in achieving a basic standard of living in Singapore which is at S$1,721.
“The latest Household Expenditure Survey states that ‘on average, the bottom 20 percent of households are each spending S$2,570 a month while having a monthly income of S$2,235, which include regular government transfers.’
This means a shortfall of S$335 on average each month,” SDP noted.
SDP also estimated that a single person would need a gross pay of S$1606.25 per month — or about S$8 in hourly wages — in order to meet their monthly expenses, assuming that the person makes a 20 per cent CPF contribution.
Minimum wage increases spending power, stimulates domestic consumption: SDP
Challenging the idea that implementing minimum wage could impact businesses adversely, SDP argued that “such views have not been borne out by research” — in fact, the party said, minimum wage practice has shown minimal negative effects on employment.
The spending power of an entire band of income earners could increase as a result of minimum wage, and that may, in turn, consequently stimulate domestic consumption, said the party.
However, to ease the financial burden of business owners, SDP pointed out that the “untenably high” rent — especially of government-owned properties — needs to be reduced and go beyond the temporary relief given during COVID-19 period, as “savings in long-term reductions in rent will compensate increased wage costs”.
“In the final analysis, businesses will not suffer. In fact, they stand to gain from the higher spending power of workers and the improvement in labour productivity as employees enjoy income security. This is a win-win situation for businesses and workers,” the SDP posited.
People’s Action Party (PAP)’s Member of Parliament (MP) Koh Poh Koon on 15 October earlier criticised the Workers’ Party’s proposal of implementing a minimum wage, warning that a minimum wage could worsen current conditions for businesses and workers, in addition to becoming a politicised issue.
Dr Koh also asserted that Government initiatives such as the Progressive Wage Model (PWM) have already helped increase the wages of lower-income workers.
Minimum wage ensures workers in any industry paid a living wage, not just select industries as seen in PWM: SDP
SDP stressed in its policy that the universal minimum wage is a cross-sectoral and national policy which will benefit the employees in other sectors such as food and beverage (F&B) as well as retail and service, as opposed to the current PWM which only covers landscaping, cleaning and security sectors.
“The PWM is a five-level career progression model where workers experience wage growth by completing courses and clocking years of experience.
“Unlike the PWM, the minimum wage will be applied to all low-income workers regardless of the industries they work in,” it noted.
Compared to the PWM, SDP emphasised that the minimum wage ensures that the entrants to any industry are paid a living wage and are not deceived by of an upskilling ladder which is often illusory.
“The PWM allows employers to exploit loopholes such as requiring employees to work extended hours without additional pay.
“The problem is exacerbated where the contract-bidding system often creates a race to the bottom, depressing the wages of workers.
“PWM also abandons those who are unable upskill to earn below a living wage,” the SDP’s policy read.
Furthermore, the Party also called for a Wage Equity Commission to recommend the minimum wage policy to the Government.
Given that the level of minimum wage depends on various factors including the cost of living index and inflation rate, SDP said that the Commission will assess the impact of the policy by taking into consideration economic conditions, living expenses, labour market and its conditions and then adjust the level annually.
SDP also proposed to implement the minimum wage universally to both locals and foreigners, as the minimum wage will encourage the employers to hire Singaporeans rather than migrant workers while preventing local lower-paid workers from being undercut by foreign workers.
“The ultimate goal is to create conditions where Singaporeans including the ones in lower-income jobs are paid wages that allow them to lead dignified, productive, and creative lives,” the SDP noted.
According to SDP, it has been calling for the implementation of the minimum wage since the 1990s.
Previously, SDP had called for a minimum wage of S$5 per hour in its 2001 general election manifesto. It later revised the proposal to S$6.80 per hour in 2010 before updating the figure to S$7 per hour in 2015.
