SINGAPORE: Minister of State for Trade and Industry, Lee Yi Shyan said Singapore must be careful about raising wages without a corresponding increase in productivity.
Mr Lee was responding to media questions about Professor Lim Chong Yah’s recent wage restructuring proposal on the sidelines of a community event.
Prof Lim had said a wage revamp is needed to address the issue of growing income inequality.
This includes progressively raising the pay of low income workers and freezing the wages of top earners.
Prof Lim suggested that those earning below S$1,500 a month should have their pay increase by 50 per cent over the next three years, and freezing wages of those earning S$15,000 or more a month, for the same period.
Prof Lim was one of those involved in Singapore’s economic restructuring exercise in the late 1970s.
“In a free market system, for it to work well, we have to be very mindful of the interventions we introduce and if you artificially raise it too much… there are consequences and some of these consequences are not what you want to see,” said Mr Lee.
“So I think by Prof Lim’s proposal, if I understand him correctly… I think this is a very drastic way of raising the wages without corresponding increase in productivity and that will have a wide impact on the economy,” he added.
Just introduce Minimum Wage for those who earn less than $1k by funding $1 for every single dollar of their salary, those affected are not large a grouping, but the funds can be derived by privating the HDB which is a cash cow, is the government willing to do that to achieve Swiss standard of Living? Impact? Those in the income bracket $1k-2k will have a pressure to increase their salary, an increase of business costs of between 3-5%, but does the benefits outweigh the investments? Yes. You will definitely win in 2016, you need to give away to get back what you deserve, understand my logic? Heeheehee.
– Contributed by Oogle.