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Singaporean asks: “What would a universal minimum wage model in SG do to our cost of living?”

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"With a recent report recommending that Singapore sets a minimum wage of $2,906 a month for every single job sector (currently only selected sectors are under the PWM), how would it affect the cost of our goods?" he asked

SINGAPORE: In the heart of Lion City’s ongoing economic discourse, a Reddit post has sparked a heated discussion about Singapore’s proposed minimum wage. The post centres around a recent report by the Lee Kuan Yew School of Public Policy recommending a monthly minimum wage of $2,906 for selected job sectors. This proposal has sparked a range of opinions and concerns.

The Reddit user said: “With a recent report recommending that Singapore sets a minimum wage of $2,906 a month for every single job sector (currently only selected sectors are under the PWM), how would it affect the cost of our goods?”

With more questions about S’pore’s proposed minimum wage, he asked: “If the minimum wage is higher than what diploma holders are earning on average, does that incentivise people to cut their educational journey short? Or would it have a positive impact on the wages of diploma and above holders? How would it affect the prices of our basic necessities and food (especially our unique hawker fare)?”

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Curious, he added: “The paper and their website clearly mentions $2,906 as a reasonable starting point for a liveable wage for singapore many times. Please correct me if “liveable wage” is something totally different from “minimum wage”. (In the 2023 paper they actually revised it to $2,990 to account for inflation).”

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User Inner-Patience answered, “Excuse me. Nowhere in the paper it says to set a minimum wage of $2,906, or any number.”

DuhMightyBeanz added, “This will never happen in Singapore because cost on business will be too great lol. Pro business, anti employee.”

Talking more specifically about jobs and the impact of the minimum wage mandate, another user added: “The first thing that comes to mind is a lot more families will make do without helpers and a lot more helpers will not have jobs. Some people think that everyone’s wage automatically goes up with a mandated minimum wage. But it really doesn’t work that way. Jobs are worth what they are worth. If a job is worth $1500, it will either pay $1500 or it won’t exist.”

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Talking about the difference between “livable wage” and “minimum wage”, another user shared, “Prob need to differentiate between universal basic income and minimum/living wage.”

DuePomegranate said: “This article is clearly about the government objecting to the researchers’ number of $2,906 being a reasonable minimum income.”

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Citing the article, she said: “The government’s proposed number is much lower: ‘Our own analysis suggests that the proposed monthly minimum income standard budget of around S$1,680 per capita is similar to the average monthly expenditure of $1,650 per capita for all families with children, rather than reflecting a more basic set of needs,’ they added.

Worried about inflation, she added: “$2906 is plainly ridiculous. Who is going to work F&B and cleaning jobs? Open up and let all the Malaysians take over these jobs? At least 50% inflation will occur in a year.”

Another responded, saying, “$2906 is basically more than 95% of poly grad’s starting pay. Imagine being able to earn that much without going to poly. I wouldn’t waste my time in tertiary education.”

The Lee Kuan School of Public Policy report on minimum household income required amid inflation “may not be an accurate reflection of basic needs”, and its findings should be interpreted instead as “what individuals would like to have”, the Government said on Sept 14.

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In a joint statement, the Finance Ministry (MOF), Manpower Ministry (MOM) and Ministry of Social and Family Development (MSF) pointed out that the report included expenditure on items such as jewellery, perfumes and overseas holidays to calculate minimum income standards.

The ministries said they supported ensuring lower-wage workers earned decent wages.

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But “a universal wage floor is not necessarily the best way to achieve this”, they added.

The ministries noted that the progressive wage model (PWM) for increasing wages as workers upgrade skills and improve productivity had been extended to more sectors such as retail, food services and waste management.

PWM wages for retail workers will increase by more than 8 per cent a year from 2023 to 2025, while those for most cleaners will increase by over 10 per cent annually from 2023 to 2028.

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