Home News Featured News Former union-chief and Temasek Chairman Lim Boon Heng spars with veteran diplomat...

Former union-chief and Temasek Chairman Lim Boon Heng spars with veteran diplomat – claims govt’s wage supplement “far superior” to minimum wage




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Dr Tommy Koh’s Facebook post criticising the biased reporting of the Straits Times on the recently concluded IPS Conference has now gone viral. In his post, the veteran diplomat questioned the decision of the newspaper not to include a picture of Professor Cherian George’s exchange with Dr Janil Puthucheary discussing the politics of diversity management.


Besides faulting the local newspaper for not giving more prominence to the discussion of Prof Cherian and Dr Puthucheary, Dr Koh also faulted the Straits Times for not covering his rebuttal to Minister Josephine Teo’s assertion at the same conference that minimum wage could cause unemployment and illegal employment. Dr Koh had countered the Minister that her “narrative is contradicted by the experience of Japan, South Koreas, Taiwan and Hong Kong which have adopted a minimum wage.”


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Mr Lim Boon Heng, a former cabinet Minister and the current chairman of Temasek Holdings, also responded to Dr Koh in his post and rebutted the diplomat’s assertion on minimum wage. Mr Lim said “evidence on minimum wage is at best mixed”, and that he “learnt early in my career with the unions that the best welfare we can provide a worker is a job.”

Mr Lim who was the secretary-General of the National Trade Union Congress (NTUC) for 13 years until he retired from active politics in 2011 said:

“…the evidence on minimum wage is at best mixed. There are studies that show higher unemployment caused by the minimum wage, but proponents for the minimum wage are not satisfied with those studies.
I learnt early in my career with the unions that the best welfare we can provide a worker is a job. Everything else is supplementary, which we should do where sensible and doable.
Then I understood that every worker hopes that this year’s income will be better than last year’s.
And for that to be sustainable, there must be productivity growth.
So we explained to union leaders and workers that we should help raise productivity. In other words, let’s make a bigger pie together, rather than fight over how to slice a small pie. Even if the share remains unchanged, workers get higher take home pay.
Today how should we look after workers’ interests, especially low income workers?
Prescribing a minimum wage feels intuitively right, but may not be the best way. I think employers should subscribe to the UN’s SDG goals. If employers imbibe the values behind those goals, they will pay workers a fair wage.
Companies will then set the right terms, when they outsource work, and not merely focus on getting the lowest cost. We need to watch how we contract out work.
While we should never forget the low income workers, in this age of disruption, we must realize that the tenures of jobs will become shorter for a wide range of jobs. Journalists now realize their jobs are not secure. The old social compact will not. So we need to find what will work.
To me, it involves a new compact that includes training and retraining for which government, employers, unions and workers all have a role.
And we need to review our social security provisions, given that more will be on short term employment, considered self-employed.
One parent told me he advised his children not to look for job security, but to look at how to get a steady stream of income. It has many ramifications.”

Dr Koh replied to Mr Lim and asked him if he agreed that every working Singaporean should earn a living wage.

“…First, does he agree with my moral position that every working Singaporean should earn a living wage?
“Second, if he does, does he agree that many of our Low wage workers are not paid a living wage?
“Third, does he agree that when the market fails the state must intervene in order to ensure a just outcome?
“Fourth, does he agree that the low wages paid to these workers is not due to their low productivity but because we have brought in about a million lowly paid foreign workers to compete with our workers?
“Fifth, does he agree that, to date, the progressive wage model has not raised the wages to a level which enable our Low wage workers to live in dignity?”

Mr Lim responded to Dr Koh and said that the Government’s wage supplement is ‘far superior’ to minimum wage.

“You will accept that there are studies that show the adverse consequences of the minimum wage?
I do appreciate and respect your moral stand that each worker should earn a ‘living wage’ though we are likely to have very differing views on what a ‘living wage’ should be.
Years ago, NTUC drew the attention of government to the ‘working poor’. One proposal, which government did not accept, was to ring fence certain jobs for Singaporeans only, just as we ring fence taxi drivers’ jobs.
Instead, government came up with a wage supplement, first as a trial, then as a permanent feature. The thinking behind this solution was not to distort the labour market, not to impose a wage cost on employers that they did not consider viable. It prevents the premature relocation of business out of Singapore to other countries with cheaper labour costs, government steps in, to ensure lower income workers get a decent income.
Yes, Prof, government does take its responsibility seriously. And yes, we should review periodically the quantum of wage subsidy.
So, Prof, we have an alternative to the minimum wage, and I think it is superior.”

Other prominent personalities and economists have also responded to the topic of minimum wage in Singapore.

Former Member of Parliament for Ang Mo Kio GRC Inderjit Singh writing in his Facebook said:

“I do believe the thinking that a minimum wage will reduce employment is outdated. Why will employers be willing to still set up operations in Singapore despite a minimum wage system? The answers lie in the many other values we have as a country- infrastructure, security, stability, connectivity, and many more. These positives greatly outweigh the impact of a minimum wage. It has worked in many countries I don’t see why it cannot work in Singapore. I made the case for a minimum wage a few times in parliament. The government actually already recognizes the need by implementing the PWM for 2 sectors. If we believe cleaners and security guards need a minimum wage, why not all low wage workers in all industries. I also wrote about this in my 2014 post in response to the president’s address. Here is what I wrote:
“…While social assistance schemes and safety nets are necessary I feel that they are not addressing the root cause of the problem – low wages. The progressive wage model is a good start in legislating a sectorial minimum wage, I urge this government to further develop the model and include more sectors. Ensuring that all Singaporeans earn a decent living wage would promote self-sufficiency and reduce their dependence on the government for assistance even to achieve a basic standard of comfortable life.”

Other prominent economists also weighed in on the debate on minimum wage and said they sees no strong conceptual or practical reason why we cannot have minimum wages in Singapore. One added: “That we’re still far from even considering it suggests that this is more a matter of the state’s ideology rather than one of pragmatic calculation.”

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