Should there be a minimum wage policy in Singapore? The topic has been raised periodically over the past few years, but has recently been gaining much more attention. It has been keenly discussed by experts, officials, academia, and the man-on-the-street with arguments for and against its introduction.
In a nutshell, proponents argue that a minimum wage will help entice more locals into the job market, reduce the dependency on foreign workers, and help low-income families. Examples from more developed countries with minumum wages are often cited in support of these arguments.
The government has made it clear that it does not think this is a good idea. The key argument for this is that setting a minimum wage will lead to higher business costs, which in turn would hurt Singapore’s competitiveness, resulting in less investments and potentially fewer jobs as businesses relocate to more cost competitive economies. The government has instead called on employers to help train and upgrade workers so that they are able to perform higher value jobs and earn higher wages.
What matters for employers is that it looks like there will not be any minimum wages in the forseeable future. Nevertheless, all employers have a fundamental obligation to their employees, especially the low-wage staff, to offer fair wages and to help them grow their skills. Hence, employers should still regularly review wages to ensure internal equity, market competitiveness, and alignment to job-worth. After all, good workers will always be in demand – and may very well be poached by a competitor offering more attractive wages or better prospects for growth and development.