Discuss minimum-wage idea now, even if it's to be implemented later: Jamus Lim

WHILE the current crisis might not necessarily be an ideal time to implement a minimum wage, the topic is worth discussing now, to prepare for rolling out such a policy in the future, Workers' Party Member of Parliament Jamus Lim said on Thursday.

His point went on to trigger back-and-forth exchanges with six People's Action Party MPs following his speech on the President's address.

Dr Lim had mentioned the idea of a national minimum wage - one of several proposals that had been in the WP's election manifesto - in a broader speech about more compassionate policy-making.

Though the government has warned that a national minimum wage could mean higher costs and lost jobs, studies show that Singaporeans are prepared to pay more for essential services, and that a minimum wage is likely to have only a minimal impact on unemployment, said Dr Lim.

Minister of State for Manpower and Education Gan Siow Huang questioned the latter point, arguing that particularly in a recession, a minimum wage would cause workers to go from "low-wage to no wage".

"We should be able to think about implementing policies in a time of crisis, because this concentrates the mind," replied Dr Lim. If an agreement can be reached, in principle, on the idea of having a minimum wage, then this can be rolled out "after the storm has passed".

A NEWSLETTER FOR YOU

Friday, 8.30 am

SGSME

Get updates on Singapore's SME community, along with profiles, news and tips.

Sign Up

Asked by MP Tin Pei Ling whether he would then withdraw the minimum wage when another crisis happened, Dr Lim said that that would not be the case - rather, "the complete opposite". The point of a minimum wage is to provide a social safety net, so removing it during a crisis would be to pull the rug out from under workers' feet.

Some might say that this historic crisis is not the right time for "soft policies", Dr Lim noted in his speech. But he argued that on the contrary, with Singaporeans being called upon to make sacrifices, they also need the reassurance that the fruit of such sacrifice will not only accrue to certain winners in the aftermath. Improving social protections can also help to blunt the populist, nationalist pressures that have surfaced in other countries.

MP Vikram Nair asked what level of minimum wage was being proposed, and if there are countries with a minimum wage that have lower unemployment rates than Singapore.

Dr Lim replied that he did not know the appropriate level, which is "exactly why we need a national commission to study this". He proposed an independent panel that would study and continually evaluate the right level.

Rather than simply compare unemployment rates across countries, he said that academic studies have repeatedly shown that the unemployment impact of introducing a minimum wage is either very minimal or statistically insignificant.

Some MPs raised the topic of the existing progressive wage model, with Zaqy Mohamad noting that it is set at a level which is "bearable" by each respective sector, and also aims to improve workers' productivity.

Senior Minister Tharman Shanmugaratnam similarly noted that the sectoral approach enables minimum wages to be set at suitable levels, whereas a single national minimum wage would force a decision on where to place it - which could be too low or too high.

Dr Lim's argument was that "over-engineering" a system could make it fragile and lead to multiple points of failure. Having different minimum wages for sectors would also lead to labour substitution, he said.

Fellow WP MP Leon Perera also entered the debate, asking PAP MPs what they would say to workers who are earning below S$1,300 a month - roughly the government's own estimate of what is needed to meet basic needs. He asked rhetorically whether such workers should be simply told to wait until the progressive wage model is rolled out to their sectors.

Amendment note: An earlier version of this story referred to Jamus Lim as Mr Lim. It should be Dr Lim. The story has been amended accordingly.