US research on minimum wage and jobs: What do you think, WP?

Singapore — Some members of the online community, drawing attention to US research on a minimum wage and jobs, have called for a response from the Workers’ Party.

The party has been calling for a minimum wage for some years now, including before and during the General Election last year.

The study by the National Bureau of Economic Research (NBER) found that increasing the minimum wage does in fact reduce employment. This research was published in January 2021. The NBER is a private, non-partisan organisation that facilitates cutting-edge investigation and analysis of major economic issues.

The study states that “(i) there is a clear preponderance of negative estimates in the literature; (ii) this evidence is stronger for teens and young adults as well as the less-educated; (iii) the evidence from studies of directly-affected workers points even more strongly to negative employment effects; and (iv) the evidence from studies of low-wage industries is less one-sided”.

This essentially means that there are more negative outcomes linked to a rise in the minimum wage, especially in the sector for younger workers and those with fewer qualifications.

The study was conducted in response to the United States President Joe Biden’s long- standing push for a federal US$15 (S$19.88) an hour minimum wage, which he brought again recently in his US$1.9 trillion Covid-19 relief package.

A post by the Foundation for Economic Education (FEE) also highlights how “the job losses that come with minimum wage hikes are a fundamental economic reality. This latest research offers yet another reminder that, no matter how much wish-casting progressives engage in, there are no escaping trade-offs in public policy”. The FEE is an educational foundation that shares worldly daily online content.

This post was highlighted by the Facebook page Singapore Matters, leading to the members of the online community asking if the WP had a rebuttal.

The WP manifesto for the last General Election stated that: “The Workers’ Party calls for all working Singaporeans to receive a minimum take-home wage of $1,300 per month for full-time work and pro-rated for part-time work”. It said it supported the notion of implementing a minimum wage.

The online community is now arguing over the post and there are calls for WP MP Jamus Lim (Sengkang GRC) to respond to the research.

However, eagle-eyed netizens have pointed out that the research was in response to an increase in the minimum wage, not to a minimum wage itself.

As at Friday (Jan 29), the WP had not responded to calls online for its stand on a minimum wage.

Denise Teh is an intern at The Independent SG. /TISG