The debate over a minimum wage, one of the most frequently discussed topics in policy circles, flared up again last week in Parliament and on social media. The Workers’ Party has pushed for a national minimum wage of $1,300 a month, while National Trades Union Congress representatives reiterated their long-held view that such a minimum wage would be unworkable and that the progressive wage model in use here is a better option. Economists have long debated the merits of a minimum wage. Its proponents point out that it would reduce poverty and inequality, raise household spending, and curb dependence on government benefits. Opponents say it can increase unemployment, raise costs, encourage outsourcing and lead to older workers being replaced by younger ones.

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Both sides present evidence to support their views. While there is little point in being ideologically opposed to the idea of a minimum wage, some practical considerations warrant attention. One is that unlike the progressive wage model, it is not linked to skill levels. This raises the question of whether bosses would consider a minimum wage to be justified in the case of unskilled workers. Related to this is a second consideration: Any minimum wage policy will need the buy-in of employers and unions in Singapore’s tripartite system. So far, this has proved difficult to obtain, even though the idea has been repeatedly advocated since the National Wages Council was established in 1972, including by its first chairman Lim Chong Yah.

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READ MORE: https://www.straitstimes.com/opinion/st-editorial/stay-focused-on-the-economic-storm-0

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