SINGAPORE: Uplifting lower-wage workers is not as easy as just setting minimum salaries and Singapore must be careful about “unintended consequences” when working through solutions, said Deputy Prime Minister Lawrence Wong on Saturday (Sep 24).
Speaking at a workshop for the Alliance for Action for Lower-Wage Workers, Mr Wong said that advancing the well-being of lower-wage workers is an important priority for the Government, and that is why it is putting in a lot more resources to uplift lower-wage workers.
But while Singapore wants to see lower-wage workers get higher starting salaries, it is also important that these workers see continued career progression throughout their working lives.
“This means not just good starting salaries but having the new wage increases tied to a skills ladder,” said Mr Wong, who is also Finance Minister.
“Ultimately, what we want to achieve is a compression of wages in our workplace, not increasing wage gaps but wage compression taking place largely by uplifting of lower-wage workers in Singapore,” he added.
He added that pursuing the objective is not as straightforward as it sounds, and that it is not just about putting minimum salaries in place.
Saying that there is “no silver bullet” in solving the problem, he cited examples of some countries with the highest minimum wages which also have high wage disparity and high unemployment rates.
“At the stroke of a pen, you can decide that this is the new minimum wage. But what are the consequences of that? Will companies end up hiring less workers? Will you have more unemployment?” he said.
“Or perhaps, in some cases, what other countries have seen is that a number of the beneficiaries of a higher minimum wage are not low-income families but young people from rich families who go out and work at minimum wage levels.
“So these are all unintended consequences that can easily happen if you’re not careful in thinking about the right solutions.”
Singapore has to think through and work together with different stakeholders on the best solutions to improve the well-being of lower-wage workers, he added.
The Deputy Prime Minister said that the Government works together with employers, union leaders and workers instead of doing things through a top-down approach.
“It takes longer for such an approach to work. It is because you have to build consensus and you have to bring people along with you, so it takes longer,” he added.
“But I think it is an approach that leads to more enduring solutions – solutions that work, not because of political headlines, but solutions that make an impact on the ground.”