Committee of Supply Debate, Ministry of Manpower, 9 March 2015
A minimum wage aims to protect employees from exploitation and enables them to afford the basic necessities of life. But critics say it makes lower skilled workers uncompetitive, resulting in job losses as companies move overseas or hire fewer workers.
There is no national minimum wage in Singapore. Salaries are subject to negotiation and mutual agreement between employers and employees or the trade union representing the employees.
However, the wages of those in the lowest income group are not enough to cope with the high cost of living in Singapore. According to the Household Expenditure Survey, there are almost 85,000 resident households with a monthly income of less than $1,000. Yet these households spend an average of $1,461 per month – or 46% more than they earn.
The Progressive Wage Model is being implemented for the cleaning and security sectors, and soon the landscaping sector. However, these are not the only sectors which suffer from the malaise of low wages. Low wage jobs can be found in other domestic-oriented sectors like F&B, retail and personal services. In these sectors, jobs are usually performed locally, for customers who are in Singapore, so there is less risk that such jobs will move overseas even if wages rise.
The Finance Minister pointed out in his Budget Statement that productivity growth in the domestic-oriented sector is less than a fifth of that for outward-oriented sectors, yet employment growth has been mainly in the former. This lends weight to the need for these sectors to be upgraded to improve their productivity.
I urge the Government to look into introducing sectoral minimum wages under the Progressive Wage Model to more domestic-oriented industry sectors, so as to ensure that Singaporeans in those sectors are paid wages that are enough for themselves and their families to live on.