National Trades Union Congress (NTUC)
secretary-general Lim
Swee Say on Friday said raising wages for
the lower-income strata in Singapore would be a “very risky” move,
reported The Straits
Times.
Speaking at a press conference on Friday evening,
Lim was commenting on a proposal floated by economist Lim Chong Yah
earlier this week, saying that people who welcomed it may not be
aware of the potential costs involved.
Professor Lim, who chaired the National
Wages Council from 1972 to 2001, said on
Monday that raising the monthly salaries of workers who earn $1,500
or less by 50 per cent over three years, while freezing the wages
of those who earn monthly incomes of $15,000 or more for the same
period, could help to close Singapore’s growing income
gap.
“This approach is very risky,” said the NTUC chief.
“What is at stake are jobs and structural unemployment. You can
push up the wages of low-wage workers by 50 per cent in three
years, but you cannot improve his skill, his productivity, his
employability by 50 per cent in three years,” he was quoted as
saying.
The broadsheet reported that union leaders welcomed
Prof Lim’s proposal, saying it was “a real morale booster” and
“long overdue”, but NTUC’s Lim said in response, “If you can up the
wages of workers by 50 per cent with zero downside, I think union
leaders, of course, will welcome it.
“But I also think that there are many union leaders
who understand that nothing comes free so there must be some
downside,” he added.
The Straits Times also
reported that Lim was not convinced that wages could be raised in
the way Prof Lim suggested without resulting in other workers and
consumers having to compensate the amount
involved.
He in fact reportedly warned that if productivity
did not rise to match the 50 per cent increase in wages, workers
would suffer from job losses and structural
unemployment.
Assuming a base pay of $1,000 per month and a group
of 400,000 low-wage workers, Lim estimated that the total amount
involved in the proposed wage hike would come up to a hefty $4.56
billion.
If the low-wage workers were from domestic sectors
such as cleaning, for example, the increase in wages would also
result in a higher cost of living for residents here — by means of
conservancy charges, for instance, added Lim.
According to the paper, Lim stressed that he was
speaking wearing the hat of the NTUC secretary-general, not in his
capacity as Minister in the Prime Minister’s office, and was not
issuing a rebuttal to Prof Lim’s proposal.
He also reportedly pointed out that in today’s
world, jobs and manpower are significantly more mobile than they
were three decades ago.
“In a highly globalised world, a slight mistake can
lead to serious repercussions,” he said.
What do you think -- do you believe Professor Lim's
"wage shock therapy" will work?
Do you believe his proposal to increase wages of
low-income workers by 50 per cent over three years will have no
downsides?
