Member of Parliament Inderjit Singh (AngMo Kio GRC) has called for a five-year transition to a government-assisted minimum wage system.
The minimum wage should be set at $1,500 a month, and the Government would support companies by topping up wages to the required level, he said. This would encourage more people to enter the workforce, help lift wages at the bottom and provide a clearer and more certain roadmap for economic restructuring, he added. The government funded wage top up would end after five years.
Mr Singh also pointed to examples of minimum wage in Hong Kong and the United States which have shown that such a system can work.
In Hong Kong, the introduction of a minimum wage has not resulted in companies leaving, and actually increased the labour force participation rate, he noted.
"As long as we have a vibrant economy, we should be confident and not afraid of a minimum wage system," he said, speaking on the second day of the Budget debate.
Mr Singh said that the Budget, which was announced last week by Deputy Prime Minister Tharman Shanmugaratnam, had good intentions but it could have been more targeted in its incentives and schemes to help Singaporeans and businesses.
The pace of economic restructuring needs to be slowed down, and more help given to companies facing spiralling costs in manpower, and rents.
"The government has placed all its bets on productivity improvements which we all know will take a longer time to be achieved, and that, too, not easily. So in the meanwhile, all other bottom line cost issues will plague companies, rendering them uncompetitive. We need to give companies some breathing space to survive first and then restructure to become competitive and then strong," he said.