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Minimum wage viable, says WP’s Gerald Giam

SINGAPORE — With the Workers’ Party (WP) coming out strong with its minimum wage proposal, questions have also surfaced about its viability, such as possible job losses, how it would apply to part-time workers and whether the minimum wage would become the maximum wage.

Minimum wage viable, says WP’s Gerald Giam

It is timely to introduce a minimum wage as Singapore is cutting back on the inflow of foreign workers, said the Workers’ Party’s Gerald Giam (right). Photo: Raj Nadarajan/TODAY

SINGAPORE — With the Workers’ Party (WP) coming out strong with its minimum wage proposal, questions have also surfaced about its viability, such as possible job losses, how it would apply to part-time workers and whether the minimum wage would become the maximum wage.

Speaking to reporters on the sidelines of a walkabout at Changi Village today (Sept 5), the WP’s East Coast Group Representation Constituency (GRC) candidate Gerald Giam sought to allay such concerns.

He said job losses would not be an issue as research has shown that a minimum wage lower than 50 per cent of the median income would not have an adverse impact on jobs.

The quantum that the WP is proposing — at S$1,000 for the first few years, before rising gradually to S$1,250 — is about 27 per cent of Singaporeans’ median income, he added.

It is also timely to introduce a minimum wage as Singapore is cutting back on the inflow of foreign workers, said Mr Giam.

Noting that many job openings remain to be filled, he said the introduction of a minimum wage will encourage more people, especially women and older Singaporeans, to join the workforce since wages will be higher.

There will also be beneficial effects to the economy, such as reducing employee turnover and motivating workers. “It’s a win-win for workers, for employers, as well as the economy,” Mr Giam said.

Yesterday, Social and Family Development Minister Tan Chuan-Jin posted a video on the People’s Action Party’s Facebook to explain why the Government’s Workfare scheme is better than a minimum wage.

Mr Tan cautioned that a minimum wage could have the “inadvertent side effect” of causing some Singaporeans to lose their jobs because companies might not be prepared to pay them the wages. Mr Giam said today a minimum wage and Workfare “should complement each other”, as the two models have worked well in other countries.

His team-mate, Mr Leon Perera, who touched on retirement adequacy issues during the WP’s rally yesterday, said today that the party is proposing to look at the long-term returns made by Singapore’s sovereign wealth fund GIC from investing Central Provident Fund (CPF) monies, and CPF interest rates.

He pointed out that there is a “certain amount of difference” between the interest rate that is paid out to CPF members and the returns made by the GIC over the long term, for example.

“We propose to make that difference transparent to CPF members, so they should know what returns are being made from .... their retirement money, on their behalf.

“We propose taking one-third of that difference and paying it back to CPF members in terms of dividends that are paid into the Special Account, where it will earn the most interest,” Mr Perera said.

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