Singapore Democratic Party (SDP)’s minimum wage proposal aims to work in tandem with other policy changes such as lower rentals and abolishment of foreign worker levy, said party chief Chee Soon Juan.
In a Facebook post on Tuesday (17 November), Dr Chee said that such an integrated solution can “result in a win-win situation for employers and employees”.
He made his remarks in response to a reader’s question on whether the SDP’s minimum wage proposal would apply to migrant workers and how it would affect the construction sector and housing prices if it is implemented.
Earlier, the SDP reviewed its minimum wage proposal to S$1,760 a month — this works out to a minimum wage of S$10 per hour based on a 44-hour work week.
SDP said in a statement on 30 October that setting a wage floor will protect workers from “unduly low pay”.
“Minimum wage should also be coupled with pro-employment policies, social transfers which allow for low-income workers to obtain a living standard,” SDP noted.
SDP also proposed implementing the minimum wage universally for both locals and migrant workers, as the minimum wage will encourage employers to hire Singaporeans instead of migrant workers while preventing local lower-paid workers from being undercut by their migrant counterparts.
Lower land prices, abolish foreign worker levy
Dr Chee opined in his post that a minimum wage policy that applies only to locals “defeats the purpose” of legislating such a wage threshold as “it would further incentivise employers to turn to foreigners in an attempt to keep wage costs down.”
On concerns regarding how paying migrant workers a minimum wage might put even greater pressure on the bottom line of SMEs (small and medium-sized enterprises), he replied: “Not if we concurrently lower land prices – and, hence, rental – so that increases in wage costs are offset by lower office rent.”
Along with the minimum wage policy and lowering land prices, the SDP chief also suggested to lower or abolish altogether the foreign worker levy as it adds a huge and unnecessary layer of cost to businesses.
“The levy serves no useful purpose other than for the government to cream off more dollars,” Dr Chee remarked.
“And remember, minimum wage means more spending power for workers. Local businesses will benefit from this as opposed to paying wages to foreigners who remit their incomes to their countries, causing funds to leave our economy,” he said.
Lowering land prices would reduce HDB prices, affecting resale market?
Dr Chee also stressed the need public housing affordable again, freeing up capital, allowing enough savings for retirees, removing the illusion that HDB flats are “nest-eggs” of Singaporeans as well as encouraging more births.
Citing the recent case where 191 households in Geylang will have to hand back their homes to Government by the end of this year without compensation, Dr Chee said the values of flats will drop as they age.
This means “there will not be a market for older flats”, he added, in explaining why lowering HDB prices would not adversely affect the resale market.
Dr Chee added that public housing should never have been used as a profit-making industry — doing so will cause all kind of problems such as what has happened to Geylang’s 191 households.
He mentioned that SDP has proposed the Non-Open Market policy last year to remedy the conundrum for existing owners who purchased their flats at inflated rates.
Low-income migrant workers needed in construction?
Speaking about low-income migrant workers being needed in construction sectors, Dr Chee argued that industrialised economies countries such as Germany and Scandinavia employ their own citizens for construction work and “not cheap labour from poor countries”.
He said that construction workers in these countries are skilled artisans who undergo proper training and education, adding that they are “paid respectable wages and valued by society”.
“These are not seen as end-of-the-road jobs that no one else wants. The workers are certainly not treated as lesser beings, herded into overcrowded and unsanitary dormitories, and made to ride dangerously in the back of pick-ups,” he added.
However, from how construction workers are viewed and treated in Singapore’s society, Dr Chee said it is no wonder that Singaporeans run away from the vocation “as fast and as far as their legs can carry them”.
“We owe it to ourselves to look beyond the patch of sky above our little well and see how these successful countries treat their peoples and their workers,” he noted.
He went on to say, “In Singapore, we have drunk the Kool-Aid that without cheap – and exploited – labour, our society cannot survive. We have been conditioned to think that only Scholars with sterling exam grades should occupy the highest rungs of society and, together with it, the biggest financial accolades.”
“Worse, we buy into the propaganda that there is no alternative to the current system. Nothing could be further from the truth.
“As I’ve said before, our biggest obstacle is not the PAP. It is what the PAP has done to our minds,” he said.