… continued from the previous post On Income
Is Minimum Wage Scheme the magic pill for the problem?
Will this work? Maybe. Do I think it will work? Probably not.
Some people cited China as an example where a minimum wage scheme did not deter investors’ $$$ from continously flowing into the country, but I believe China is not a good example.
The monthly min wage of a China worker, as it stands now, is an average of $1000 yuan (SGD$200) a month… still a very much lower figure than many countries. And given the size of the population over there, any businessperson in his right mind would still choose go there since cost remains remains relatively low and potential for profits remains huge.
A better example will be the US. They have a min wage of about USD$7 (SGD$9) per hour, but It didn’t help their workers much as many jobs have been outsourced to China, India and other emerging countries. Now many Americans are crying murder over the loss of jobs and are demanding Obama’s govt to do “something”. Exactly what is that something? Nobody is sure.
So how to stay competitive against a nation of people willing to work cheap? In other words, how to fight..? Unless we are willing to go cheaper than them but that is NOT exactly what we are looking for.
Furthermore, for the business owners, guess where they will get the money to pay for the increment in wages? From the consumers of course… and already we are complaining against the rising cost of living,
IMO, wages should follow in accordance with the economy. Higher growth, higher wages, lower growth, lesser increment (hey note, I didn’t say NO increment!!)
That being said, minimum wage might just work IF Singaporeans are encouraged and motivated to increase productivity for that incentive. But it is a long and ardous task to change the mindset of many Singapore workers.
*PS: I am well aware I could be proven wrong. But that is perfectly fine with me. I am not God. In fact, if we can enjoy higher wages and stay competitive, I will be most happy to be wrong.*
To be continued…