Home News Featured News Jamus Lim should "test out redundancy insurance proposals in Sengkang GRC"

Jamus Lim should “test out redundancy insurance proposals in Sengkang GRC”

Academic questions sustainability of scheme proposed to alleviate job insecurities of workers




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Singapore — An academic has written an open letter on the minimum wage and redundancy insurance proposals mentioned by Workers’ Party candidate Jamus Lim during the campaign for the recent General Election.

The open letter on July 17 was written to the Chinese daily Lianhe Wanbao by Senior Lecturer of Statistics Wu Zhengxiao of the Singapore Management University (SMU). It was titled: “Two suggestions for the Workers’ Party (WP) Member of Parliament Jamus Lim.”

Dr Wu referred to the WP’s call for a minimum wage and redundancy insurance proposals that were made during a live television debate on July 1 involving senior members of four political parties ahead of Polling Day on July 10.

In his letter, Dr Wu said he was “quite surprised” that Dr Lim was proposing a minimum wage as “most economists would firmly oppose” the implementation of a minimum wage when there are rising unemployment and a downward economy.

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Dr Wu also questioned the sustainability of the WP’s proposed redundancy insurance scheme. The WP manifesto mentioned that there should be redundancy insurance for workers who have been retrenched by providing them with a stipend for up to six months while also complementing existing programmes such as re-training and re-employment.

This was suggested by the party to alleviate the job insecurities of workers in light of the technological disruptions and global events that may lead to higher redundancy rates. The scheme will see the average worker paying a premium of S$4 per month into an Employment Security Fund, with employers matching the  contribution. This is so that when the worker is retrenched, he or she will receive a payout equivalent to 40 per cent of last drawn salary for up to six months, with a cap of S$1,200 per month and a minimum payout of S$500.

However, using the current national average salary of S$5,596, Dr Wu calculated that the amount received by an employee classified as “redundant” to be S$2,238 per month, for six months, which does not appear to take into account the cap stated in the manifesto. Dr Wu also suggested that the premium “realistically” be a lot higher than S$4 per month.

Dr Wu made two suggestions for Dr Lim:

“During the debate, he said that the WP will not disagree for the sake of disagreeing, which is well-said.

“Here’s my first suggestion — I hope that Dr Lim can also apply this to his party’s proposals, for example, the untimely minimum wage policy, instead of agreeing with it for the sake of agreeing.”

He added that Dr Lim should test out the redundancy insurance scheme in Sengkang GRC if the WP thinks it is feasible.

“At the next general election in five years, if Dr Lim can say that the WP has ‘tested it’, it would be more convincing than saying that they have ‘done the math’ while proposing new policies,” he said.

Jamus Lim’s take on the minimum wage policy

Dr Lim had taken to Facebook shortly after the General Election to defend claims against the minimum wage policy.

He said he had held the position from the start that the “min wages is not unabashedly a good policy. But it is a good start that is also evidence-based”. He noted how almost “all meta-analyses for the UK and US find little or no employment effects from min wages”.

He also noted that there are country-specific idiosyncracies and that “it is crucial that we have an evaluation framework in place and an independent min wage-setting board” in order to make “on-the-fly adjustments” in response to local conditions.

On July 23, Dr Lim was among seven new faces elected to the 36-member council of the Economic Society of Singapore (ESS).

The society’s honorary fellows include Senior Minister Tharman Shanmugaratnam, Deputy Prime Minister Heng Swee Keat and former Prime Minister Goh Chok Tong. /TISGFollow us on Social Media

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