Thu, Oct 15, 2020 – 5:18 PM

A MINIMUM wage could hurt firms and workers, and runs the risk of being politicised, National Trades Union Congress (NTUC) deputy secretary-general Koh Poh Koon said on Thursday, in a speech advocating for the tripartite Progressive Wage Model (PWM) instead.

According to the Manpower Ministry, about 100,000 low-wage workers earn below the Workers’ Party’s (WP) proposed minimum wage of S$1,300 a month, said Dr Koh. About a quarter of these workers are self-employed and would not benefit from any minimum wage.

After accounting for the Workfare Income Supplement wage top-up, only a “small residual number” of about 32,000 full-time employees earn below S$1,300, about 1.7 per cent of the local workforce, he added.

Dr Koh, who is also Senior Minister of State for Health, was speaking in the second day of debate on Deputy Prime Minister and Finance Minister Heng Swee Keat’s ministerial statement, which accompanies a supplementary supply bill reallocating government expenditure for Covid-19 support measures.

Dr Koh identified three issues with a minimum wage. First, it could hurt small and medium-sized enterprises (SMEs) and the vulnerable workers that it seeks to help.

“There must be a basis for setting the minimum wage that reflects the realities of each sector, including the profile of the low-wage workers in that particular sector, so that it is sustainable, it benefits them, and avoids any unintended costs.”

Second, wage-setting could be politicised, with political parties trying to outdo each other by proposing higher wages, in a “political auction”. And third, there is the question of whether it should apply to migrant workers.

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He asked for the House’s support for a continued PWM approach instead. The PWM lays out sector-specific wage and skills ladders. It is currently implemented for cleaning, landscaping, and security, with plans to expand it to other sectors.

In response, Leader of the Opposition Pritam Singh said that the question was precisely about how to help the 32,000 workers who are not yet covered by the PWM. He asked if there was a need to wait so long to cover these Singaporeans.

Mr Singh disagreed that a minimum wage would be open to politicisation, as it could be set by experts and take reference from statistics such as the average household expenditure on basic necessities.

As for foreign workers, he clarified that the WP’s proposed minimum wage would not include foreign domestic workers or other foreign workers, noting that there are existing quotas and levies that can address any potential impact of a minimum wage on demand for foreign labour.

Fellow WP MP Jamus Lim added that the WP does not want the minimum wage number to be politicised either, which is why they would like it to be handled by an independent wage board with representation from academia, the labour movement, and employers.

As for firms, Mr Singh said he did not believe that SMEs would be significantly affected by the proposed minimum wage. A greater concern, he added, was potential profiteering on the back of the PWM, for instance if service providers “price in” PWM increases that may not necessarily go to workers.

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WP MP Leon Perera also questioned why the government believes the 32,000 workers that could benefit is a small number, yet fears that a minimum wage affecting this small number of workers would hurt SMEs.





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