Government Must Set Minimum Wage, Not Market Forces

I refer to the reports, 'Minister restates stance against minimum wage' and 'Basic Pay: Tommy Koh weighs in' in the past two days.

If the Government's approach is to let the market forces determine the wages of low-skill workers and supplement the low wages through Workfare, it is sending a wrong signal to the business community that underpaying low-skill workers is an acceptable practice. It is also indirectly encouraging some businesses to continue to operate in an 'unreal' economy.

The much talked about market forces to set the wages of low-skill workers do not work in reality. How can a low-skill worker here compete with his foreign counterpart who can feed a whole family on just $500 a month? With a strong Singapore dollar, this meager salary can be stretched even further when converted to local currency.

The existence of the Workfare programmes is proof that such market forces are actually shortchanging our low-skill workers.

The argument for a regulated wage for low-skill workers is even more compelling when you see the living conditions and constant struggles these foreign workers have to put up with in Singapore. They have to cut corners everywhere to ensure there is money left at the end of the day to remit home.

I once witnessed a foreign worker emptied his pocket to pay for medicine at one of our local hospitals. The look on his face is heart-wrenching.

The Government, being the sole gatekeeper in the supply of cheap foreign workers, has the biggest say on how much these low-skill workers should be paid. It must do so because the world is bewitched by a globalised economy. Market forces would only exploit low-skill workers to the fullest, locals and foreigners included.