SDP: Model For Implementing Minimum Wage In Singapore

Minimum wage (the lowest level of wages an employer may legally pay an employee) is an important policy tool that balances the needs of an economy with those of low-income workers so that economic growth occurs in a just and sustainable manner.

A wage structure that is out of kilter with the cost of living and productivity is inimical to long-term growth.

Under the SDP ‘s A New Economic Vision for Singapore, the government will establish a Wage Equity Commission (WEC) to recommend the minimum wage level.

The WEC will comprise representatives from trade unions, chambers of commerce, professional associations, social work organisations, and academe.

The determination of the minimum wage level will be based on a basket of factors including the cost of living index and inflation rate.

Based on a wage level that would allow a worker working full-time (44 hours per week) to afford basic necessities, the SDP recommends the official minimum wage to be $7 per hour. This works out to be $1,232 per month for a full-time job of 44 per week. The amount would be subject to review by the WEC.

Following the enactment of the Minimum Wage Act, the WEC will assess the impact of the policy on a basket of indicators (see box on right) and publish annual reports to monitor the situation.

In addition, the WEC will be empowered to deal with complaints of wage manipulation and non-compliance by employers.

The Progressive Wage Model recently introduced by the PAP targets only a small number of low-wage workers in the cleaning and security industries. What about workers in other sectors who are paid below a fair, living wage?

There is also no mechanism to stop employees from manipulating the system by paying workers more but extending their work hours.

Hong Kong implemented minimum wage in 2011 amidst much scare-mongering by the policy’s opponents that such a law would increase business costs to the extent that it would make the economy less competitive.

However since its implementation, minimum wage has not adversely affected Hong Kong’s economy which continues to remain competitive and buoyant.

Singapore is one of the few countries left in the world without a minimum wage law. The SDP will campaign for minimum wage, as we have in the past, in the upcoming elections.



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