SDP - Jan 2014 - Tharman is wrong

[Cosmos10]

Tharman is wrong

Added on: Monday 13 January 2014

by the Singapore Democrats

http://yoursdp.org/news/tharman_is_wrong/2014-01-13-5765

 

[Cosmos10]

Tharman is wrong

Deputy Prime Minister Tharman Shanmugaratnam said last week (please refer to: http://www.todayonline.com/singapore/targeted-wage-model-can-better-help-vulnerable-tharman) that "a minimum wage system has crippled countries in Europe and the United States, particularly in worsening employment conditions." Such a statement demonstrates a careless disregard for facts.

The economic crisis which led to the high unemployment rate in the US and Europe was not brought about by the minimum wage system but by the criminal acts of Western bankers who played fast and loose with the financial system.

It was the buying and selling of credit default swaps and the subprime loans in the US that triggered the financial collapse in 2008. This - and not the minimum wage system - caused the destruction of the economy which led to massive unemployment.

If minimum wage has crippled economies, how do we account for Switzerland and Norway which have unemployment rates and economic performances similar to Singapore's? The minimum wage in both countries is set through collective bargaining.

Australia's economy, which includes one of the highest levels of minimum wage (A$16.37 per hour) in the world, has been out-performing ours. In the last 5 years, the annual GDP growth averaged 3.4% for Australia and 1.3% for Singapore.

Perhaps, the most significant indicator is that the citizens of these countries enjoy a quality of life and experience a sense of well-being and happiness that Singaporeans can only dream of.

Another case in point is Hong Kong which introduced minimum wage in 2011. The territory's Minimum Wage Commission (MWC) found that since the introduction of the law, the number of long-term unemployed persons (i.e. unemployed for six months or above) actually fell in the period after the implementation of minimum wage. The Commission concluded that:

In sum, local enterprises did not seem to cut down recruitment significantly after the implementation of the initial [minimum wage] rate. On the contrary, with the expanding economic activity, the number of establishments increased in tandem. Incentives for business start-up stayed positive generally.

Then there are the so-called breakout TIP nations (Turkey, Indonesian and the Philippines) which have been singled out as economies that show the most promise going forward. They all have minimum wage.

To give the idea that minimum wage is the cause of high employment, as Mr Tharman (who is also the Finance Minister) does, is to cherry-pick information and present the case in a manner that is devoid of intellectual rigour.

The truth is that minimum wage is not the magic pill that causes economies to excel. But neither does it cause them to fall apart or unemployment rates to go up.

Minimum wage is one of the many measures that, if designed and implemented intelligently, protects workers in low-income groups and helps a society to progress in a sustainable manner.

While the PAP government has taken a step in the right direction by mandating that cleaners be paid no less than $1,000/month, it is disappointing that, given the dire situation of our wide income gap, the Government continues to refuse to implement a national minimum wage law. Worse, it resorts to using dubious analysis to support its position.

By refusing to do what is almost universally accepted as an essential economic measure (joining countries like Burundi, Tonga, Somalia, UAE and Yemen), the PAP Government continues to hurt the most vulnerable in our society.

The SDP will present a comprehensive case for minimum wage for our workers in our forthcoming alternative economic plan.

 

[Cosmos10]

Min wage: The govt has done the right thing

Added on: Thursday 09 January 2014

by the Singapore Democrats

http://yoursdp.org/news/2014-01-09-5764

The Government has decided to introduce a licensing regime which will require employers to pay cleaners a starting salary of no less than $1,000. It has done the right thing.

The PAP will not admit that this is akin to setting a minimum wage, which it has always resisted. Nevertheless it is a positive development for workers in Singapore especially those in the low-income groups. The SDP welcomes the policy change.

There, however, remain concerns. First, $1,000 is still not fair wage. Given that the cost of living in Singapore is one of the highest in the world, a salary of $1,000 is not sufficient for workers to survive on.

In addition, the entry-level salary should be legislated across the board as a national wage law where no Singaporean employee will be allowed to be paid anything less than the minimum wage. The proposed measure of the licensing regime that will be introduced in Parliament next month leaves out workers who are not in the cleaning service industry and who are still not paid a living wage.

Third, the idea to legislate a minimum wage should be made at the hourly level. This will enable part-time workers to be covered.

The SDP has recommended that the minimum wage start at $7 per hour. This will work out to at least $1,232 per month for workers who work the standard full-time of 44 hours a week. Under such a plan, part-time workers will also be assured that they are paid no less than the mandated minimum amount.

The SDP calls on the Government to legislate a minimum wage law and not handle the important matter of workers' wages in a half-hearted and piecemeal manner like the current proposal.

The SDP has campaigned for minimum wage for more than a decade because we believe in investing in our people. We are glad to see the PAP finally coming round to the idea even though much more needs to be done.

 

[Cosmos10]

The minimum wage: Let's have a grounded discussion

http://yoursdp.org/publ/perspectives/the_minimum_wage_let_39_s_have_a_grounded_discussion/2-1-0-1433

Category: Perspective
Added on: 25 March 2014

by Jeremy Chen

The PAP and its supporters routinely make ideologically based claims that are supported by hypotheticals but not by real evidence (especially statistical evidence). One example is the topic of introducing a minimum wage, an area of contention where PAP claims are more ideological than logical. In this discussion, the PAP has been particularly long on hypotheticals and very short on specifics.

In the domain of mathematics, it is well known that one can prove anything one wants about "elements of the empty set" because there is nothing in there. (For instance, the following statements are true: (i) all elements of the empty set are greater than 1, (ii) all elements of the empty set are less than 0, and (iii) all elements of the empty set are made of green cheese.) Similarly, one can make any claims about classes of businesses or workers to which nothing belongs and have those be tautologically true. But such claims add nothing to the public discourse and serve only to mislead.

So let's be grounded in our discussion. We propose that a supply chain (or part of a supply chain) that operates in Singapore and cannot afford to pay its Singaporean workers a living wage (say about $7/hr) is not productive enough to be operating here. This is a reasonable point to begin our discussion. Singapore is a space-bound nation and unproductive commercial businesses should not be operating here and taking up that space (not that their cashflow would support it for long anyway).

The question, then, is whether the above proposition is reasonable. We put it forth as a possible starting point and are open to reviewing our position should reality throw up relevant facts we have not considered. We challenge the PAP to offer REAL and SPECIFIC examples of for-profit businesses that should be operating in Singapore but are unable to offer such a wage. If such examples exist, they should be easy to point out. No pointless hypothetical, please.

There is an alternative formulation to the above question: We ask that the PAP cite an example of work that should be carried out in Singapore but is not worth $7/hr. Let us be precise with regards to what "worth" means. Such "work" would serve some people or organizations. In the event that such work is withheld by all suppliers unless $7/hr is paid, would those customers be willing to fork out $7/hr or decide to forgo it altogether? If those customers, acting as clinically rational economic agents, are willing to fork out $7/hr, then it is worth at least $7/hr to those customers, and hence has a market value of at least $7/hr.

So in this discussion of the minimum wage (and other policy discussions, for the matter), let us all be grounded and work with real examples. This way, can we move forward and contribute positively to public discourse.

Jeremy Chen is pursuing his PhD in Decision Science at the NUS and is a member of the SDP's housing policy panel.

 

[da dick]

no minimum wage or prog wage will bring back the middle class jobs and incomes the gahmen and singaporean businesses have destroyed.