In the past, the justification for minimal action on raising wages for the poorest and least well off in society was that the government wouldn't be able to ensure economic competitiveness in the region if it raised wages beyond a certain amount or implemented a minimum wage.
Now we are reaping the effects of this race to the bottom. Unsustainable working conditions, lax enforcement of employment rights and scant wages will be the nail in the coffin that drives able workers to more attractive markets. We will also see a decrease in economic competitiveness if frequent labour disruption becomes a more pronounced trend.
So even as we seem to abide by the rule "give a person an inch and they'll take a mile" in governance, we will see that there is an increasing need for certain investments to be made which might not have an economically driven ROI, but more of a social payoff for greater stability and employee well-being. This will in turn have a ripple effect in sustaining the well-being of society as a whole. Happier workers make for a more productive and happier population.
Potential solutions here:
1) Foreign workers may be willing to work for less, but it does not mean that we should pay them scant wages. We may need to look at a calibrated minimum wage that is catered according to the skill sets required by each sector. This may be calibrated according to factors such as intensity of menial labour, level of danger, complexity of skills required, etc. Wages should be competitive upwards, like white-collar jobs, not downwards. It is this opposing cycle that is forcing the income gap further apart.
2) People tend to ask, whose pockets will the wages come from. Then we will need to look at the other overheads involved in running a business that suppress the ability of employers to dole out higher wages, ie. Property rental
3) Singaporeans First – I’m not advocating shutting off the tap on foreign labour completely. It is an irresponsible statement to make and one that is not sustainable for our economic model. But we also need to look at how to better match people with available jobs. One area to look at is potentially establishing more local employment agencies within constituencies. Currently, CDC tends to match potential low-wage workers with job opportunities that are too far away from their homes. Throw in transportation costs, time spent away from children, time travelling, and the cost-benefit analysis weighs against working in such jobs. We could look into proximity-based matching of jobs for this income group. This will make it easier for lower-income Singaporeans to find suitable jobs.
Do share your thoughts?
Nicole 