Wednesday, September 22, 2010

Why is it worth looking at the Minimum Wage from a different perspective?

Singapore has so far refused to entertain the thought of enacting a Minimum Wage law because I believe they are worried that they will lose their competitiveness. If you look at it from an angle, it is true. How do you gauge the worth of a certain job? How do you determine the wage for a job scope and how you get people to agree with you that the wage is the minimum? Manual labour? Mental labour?

All the above and maybe much more will come into mind when you think of enacting a Minimum Wage law. However, your viewpoint will start to change once your objective is much clearer. What's the ultimate objective of enacting a Minimum Wage law? It's to survive in Singapore and minimise expoitation. If you look at it from the objective perspective, you will find that you won't ask the above questions. You will ask a set of different questions. How many meals a person need to eat daily? How much is a meal? Cost of accommodation? Cost of Transport? I believe the numbers here are much more factual than determining the wage for a certain job scope and I believe the numbers are available.

To add some icing on the cake, Singapore need not enact the Minimum Wage law. They can just issue guidelines on the Minimum Wage. The reason is quite simple. If you look at the objective, it's to determine the minimum wage needed to survive in Singapore. Therefore, it should be up to the employers to determine the job scope needed in order to justify hiring that person. Give a constant and the variables should add up.

I believe Singaporeans are not stupid. If a company is paying below the minimum wage, they should be smart enough to see if it's justifiable. There may be certain business cases that justify paying below the minimum wage. If they are over-exploited, they can always find another job. This will bring some power back to the employees and prevent employers from exploiting their workers. The guidelines give employees a choice too because they have a choice in the jobs that they wish to take.

The guidelines should be widely available for anyone to obtain so that everyone knows about it. Fix a certain period where it will be reviewed so the employers have some lead time to plan for the a wage hike if they know that the inflation is high for that year. The fact that the guidelines are widely available (even to foreign workers) will pressure the employers to at least justify the cost if it is below the minimum wage.

Implementable? No idea. I'm not a politician, but I like to daydream. :)

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