Actually they do...they use consultants to gather intelligence
on how much employers/businesses will take if they raise taxes or
impose a minimum wage. The experience of Europe has shown that if
you have a minimum wage, that will automatically become the maximum
wage a new employee can expect. To make sure workers have decent
wages, you will have to raise the minimum wage to a decent level.
But that will mean higher costs for employers, who will have to pay
the minimum wage to foreign workers as well.
The UK minimum wage is 5.52GBP per hour or S$15.50. If you hire a
waiter to work 8 hours a day, 5 days a week for 4 weeks, the bill
comes up to S$2480. Pretty decent, you might say. But can the
restaurant afford to pay this to its lowest-paid waiters? All the
PRC workers will flock to Singapore and there will not be a
shortage of waiters. Instead, the restaurant owners will either
increase your bill or pack up and set up shop in JB or Hong Kong.
Since Hong Kong, our closest competitor, does not have a minimum
wage, we will lose out in competitiveness. The luxury restaurants
like Les Amis will not have a big problem....your dinner bill may
go up from $600 to $650 for two....not a big problem. But the
coffee shop owner may have to close shop, because with his clients
he cannot afford to pay 2.4k for a coffee shop assistant.
But maybe the UK rates are too high. Let's use rates in Asia then.
The minimum wage in fellow industrialized nation South Korea is
30,160 won or S$46 per day. The waiter who works 8 hours a day, 5
days a week, 4 weeks a month will now cost only S$920. The employer
is happy, because he now can reduce the salaries of all his workers
to just $920 a month, because that is perfectly legal. It's good
for business, but is it good for Singaporean workers?
