Global competition cuts wages at the bottom but boosts those at the top
By
Jeremy Au Yong
MM Lee said that having a minimum wage in Singapore could prove to have adverse effects. -- ST PHOTO: CHEW SENG KIM
HAVING a minimum wage in place here to narrow the income gap could do more harm than good, Minister Mentor Lee Kuan Yew said last night.
In fact, every country that has set a minimum wage over what the market will bear has found that the move cuts jobs, he noted. Employers who are forced to deal with higher staff costs would simply find ways to hire less people.
That is why Singapore's approach has been to create as many jobs as possible, while leaving the market to decide the right level of pay. The rationale for this is that having any job is better than having no job at all. 'Never mind your Gini coefficient. If you don't have a job you get zero against those with jobs. So our first priority is jobs for everybody,' he said.
The Gini coefficient measures the income distribution across a country and is often used as gauge of the income gap.
MM Lee was responding to a question about what Singapore could do to narrow its income gap. Mr Elvin Ong, a fourth year social sciences and business student from the Singapore Management University, had asked him what Singapore could do to help its bottom 20 per cent.
The gap between the haves and have-nots is a recurrent political issue in Singapore and there have been concerted efforts by the Government to do more for the low income group.
Read the full story in Tuesday's edition of The Straits Times.
