Workers’ Party (WP) MP Jamus Lim backed his party chief Pritam Singh’s push for Singapore to implement a universal minimum wage, this week. The WP leader’s call came about a month after the Government said that it would not pursue a national minimum wage since the existing Progressive Wage Model (PWM) scheme acts like “minimum wage” plus in several sectors.
On Monday (12 Oct), Mr Pritam called on the authorities to implement a universal minimum wage while it expands the PWM and suggested that the minimum wage be set at $1,300 – the amount that is required to meet basic needs, according to Government estimates.
Calling minimum wage both a “moral imperative” and an “act of national solidarity” with the Singaporean worker, he wrote on Facebook: “A universal Minimum Wage for the Singaporean worker is not just a moral imperative, it is an act of national solidarity, one that is even more relevant in today’s economic environment.”
Mr Pritam, who also serves as Leader of the Opposition, asserted that problem with the PWM approach lies in the time it takes for the scheme to be rolled out in each sector. Pointing out that the PWM has been expanded to cover just three sectors in eight years, he asked:
“The problem with this sectoral approach towards minimum wage is that it takes too long implement. It has been eight years, with three sectors covered. This is far too long for Singaporeans who work outside these sectors. How long are they to wait?”
While the Government expands the PWM to cover all sectors, Mr Pritam suggested that the authorities could consider implementing a minimum wage as a “parallel endeavour”.
He said that a universal minimum wage with S$1,300 as a base could be introduced even as the authorities explore “sectoral improvements or what is effectively the Plus side of Minimum Wage Plus.”
Mr Pritam’s post was published at 1.59pm on Monday. A mere three minutes later, Dr Lim republished the post wholesale on his own Facebook page. Dr Lim and Aljunied GRC MP Gerald Giam were the only elected WP MPs who shared Mr Pritam’s post on their personal social media pages.
Minimum wage is an issue that is close to Dr Lim’s heart. The economist holds that the PWM is not equivalent to a minimum wage model and that it does not work for the 100,000 workers the WP estimates earn below the minimum wage.
Minimum wage was one of the issues Dr Lim campaigned for during the 2020 general election hustings. Just a couple days after the polls in July, in which Dr Lim was elected at Sengkang GRC, the first-time MP wrote on Facebook:
“Some have suggested that the Progressive Wage Model (PWM) rolled out by the govt, is (in effect) a min wage. I don’t agree. The PWM ties wages to job function, which still gives too much room to employers to cut corners, without redressing power differentials.
“It also leaves those who simply cannot upskill in the lurch, and earning below a living wage. The reality is that, by our estimates, 100,000 workers remain below the min wage, and so PWM is obviously not working for these people.”
In the same post, Dr Lim addressed concerns about the WP’s minimum wage proposal and indicated that the fiscal burden of minimum wage would be borne mostly by consumers who buy products or services with higher prices and, in part, by firms. He wrote:
“Who pays for the minimum wage? Some people think this would cost the government. Actually, most min wage models have no fiscal impact, and the burden is borne mostly by higher prices consumers pay (3/4), and in part by firms (1/4).
“I see this as a feature, not a bug. The point is to redistribute some bargaining power from capital to labour, and I think we can afford to chip in a little to take care of the least well-off in society. With many more buyers than min wage workers, the price effect will be small.”
Some observers felt that Dr Lim’s statement about who bears the cost of minimum wage is at odds with his statement in a televised election debate that WP’s manifesto, which includes a minimum wage policy, is budget-neutral.
More recently, remarks Dr Lim made about minimum wage in his maiden parliamentary speech last month drew mixed reactions. In his speech, Dr Lim said that the existing policymaking approach is one that leans towards efficiency rather than equity as he extolled the need for more compassionate policymaking.
Proposing that a “simple, across-the board” minimum wage is one plausible policy the Government could adopt, the economics professor claimed that there is evidence to show that most Singaporeans are willing to pay more for essential services and that the “employment impact of a minimum wage is likely to be very limited.”
While he acknowledged that some might think it may be unwise to adopt “such soft policies” amid the COVID-19 pandemic, Dr Lim urged Parliament to commit to such “principles of compassionate policymaking” now and make plans to implement the policies once the crisis passes.
Dr Lim’s speech drew significant flak from ruling party politicians, with six MPs from the ruling People’s Action Party (PAP) rising to challenge him on the efficacy, timing and appropriate figure of a minimum wage policy.
Fellow first-term MP Gan Siow Huang felt that rolling out a minimum wage policy especially during an economic downturn carries a “very real risk” of causing many workers to go from “low wage … to no wage”.
Echoing Ms Gan’s view that implementing such a policy at this time could cause an adverse impact on the economy, MacPherson SMC MP Tin Pei Ling asked Dr Lim whether he recognises these unintended consequences. She also asked whether minimum wage should be withdrawn in times of crises and reintroduced when the economy recovers.
In response, Dr Lim acknowledged that rolling out such a policy in the current climate “may not be ideal”. With regards to Ms Tin’s question, he said that the point of a minimum wage is “to provide a social safety net”. To remove the policy during a crisis will “pull the rugs out from under those workers that rely on the minimum wage in times of crisis”.
Both Sembawang GRC MP Vikram Nair and Marsiling-Yew Tee GRC MP Zaqy Mohamad asked Dr Lim to clarify what level of minimum wage he would propose, to which Dr Lim replied that he does not know what an appropriate minimum wage should be.
He, instead, suggested that there should be an independent national commission, consisting of university professors and tripartite partners, to study this and review the level of minimum wage annually.
While the exchanges between the PAP MPs and Dr Lim garnered interest, it was Senior Minister Tharman Shanmugaratnam’s rare entry into the fray that drew the most eyeballs.
Referring to Dr Lim’s speech, Mr Tharman said: “None of us have a monopoly over compassion and I say this is not to discredit anyone. In particular, I really respect where member Jamus Lim is coming from intellectually, emotionally and so on.”
He added: “I’m not directing this at anyone in particular – none of us should assume that we have a monopoly over compassion…Here’s a bit of advice – try to avoid strawman arguments, like saying that the Government is only interested in efficiency, and not equity. That’s frankly laughable.”
Asserting that the Government is trying to raise the living standards for the poor without losing the wage earner’s ability to have the pride of a job and earn a wage through policies like the PWM, Mr Tharman said:
“We are frankly not very far away from each other in that objective … There is a consensus, let me put it that way. That should be our objective, but just try to avoid strawman arguments and pretending that you have a … monopoly over compassion.”
Sharing that the Government believes there is more to be done and that Singapore has achieved significant progress on raising wages through the PWM, Mr Tharman said that he would not “exaggerate the differences” between the minimum wage model and the PWM, which he considers “minimum wage plus” with a sectoral approach.
Dr Lim replied: “I regret if it came across that I was suggesting that only I or the party, or any individual has a monopoly over compassion. In fact, that was explicitly why I did cite cases where I felt that existing policy demonstrated oodles of compassion. I even cited other members who are not from our party that have also talked about compassion.”
Claiming that he was not making a strawman argument, he said: “I’m not suggesting that every policy that is currently in place is only geared to efficiency. I’m not suggesting that every policy that I have laid out in my speech and elsewhere, is only geared to equity.”
He added. “And I am arguing that we can move more in the direction of favoring equity over efficiency, and that was the entire point of the argument.”