Friday, September 5, 2014

Singapore's First Blunder: "Minimum Wage"

I am very disappointed.

Did you know that Singapore now has minimum wage? Yes, it has been cross-dressed and displayed to the public as the "Progressive Wage Model". It is now rolling out for cleaners, setting a minimum wage at $1000 a month.

Bull. Shit.

Even Wiki calls out that their bluff.
This model was designed to enable rank and file workers to climb the wage ladder, and provides for a minimum wageThis would then lead to higher wages for the worker and improved overall productivity which helps sustain economic growth.
Would someone like to share with me how this would lead to improved overall productivity and sustainable economic growth?

All I can see is that:

1) companies start firing the slowest and weakest workers, and replacing them with the best workers their $1,000 a month can buy

2) or reduce their manpower count massively and instead replace manual cleaners with operators of cleaning machines

3) smaller, inefficient companies are given a free pass to stay behind the curve

4) the perfect breeding ground for more of this sort of bull shit.


This is bullshit, and I hate this sort of bad economic policy. I didn't realize we were living in a socialist state.

I have written about why I reject the minimum wage, but I have come across an even better article. These are my 2 favourite excerpts.
In truth, there is only one way to regard a minimum wage law: it is compulsory unemployment, period. The law says: it is illegal, and therefore criminal, for anyone to hire anyone else below the level of X dollars an hour. This means, plainly and simply, that a large number of free and voluntary wage contracts are now outlawed and hence that there will be a large amount of unemployment. Remember that the minimum wage law provides no jobs; it only outlaws them; and outlawed jobs are the inevitable result.
Minimum wage is government-mandated compulsory unemployment of their citizens.
All right, if the minimum wage is such a wonderful anti-poverty measure, and can have no unemployment-raising effects, why are you such pikers? Why you are helping the working poor by such piddling amounts? Why stop at $4.55 an hour? Why not $10 an hour? $100? $1,000?
It is obvious that the minimum wage advocates do not pursue their own logic, because if they push it to such heights, virtually the entire labor force will be disemployed. In short, you can have as much unemployment as you want, simply by pushing the legally minimum wage high enough.


Why not $1000 an hour wages for everyone? If $2 an hour is shit and $10 if great, why isn't $1000 an hour just fucking brilliant?

Because it isn't.

I used to think of Singapore as the model and global leader in the world of free trade. I even brag and tell my foreign friends proudly that in Singapore there is no minimum wage and they would *gasp*. Once I tell them about the unemployment statistics, which can be up to 10 times less than in their home country, they start to think about the logical, functional role that minimum wage plays to (not) support the economy.

Granted, this is just for 1 industry for a select group of workers. Still, like I said. If you can raise the minimum wage to $1,000 a month, why not $10,000 a month? If government policy can mandate this on one industry, why not the rest?

Unless the government can keep true to their "productivity improvement" that the "Progressive Wage Model" promises to bring, this is going to be a massive failure even before it starts. Not only is it not economically sound, it spreads and breeds entitlement and protectionism, the very two things the government should be fighting against. Ownership and competition is what will help us prosper!


On top of the government pro-actively yelling at all businesses to buck up, innovate and improve or die, now businesses get even more squeezed on the cost side? Rising rents, transportation costs, horrible labour skills mismatch and now this "progressive wage model"? This is a freaking riot to me. Double standards.

I kind of feel betrayed that I believed in the "progress" that this country has been striving for.

2 comments:

  1. I think minimum wage will decrease productivity in the long run, increase costs for the business and a competitive side to the already demand driven economy.

    Not sure how it will.helps throughout.

    ReplyDelete
  2. Is 15k/mth for MPs sort of a minimum wage? ;)

    ReplyDelete

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