Paying more doesn't solve income inequality

The panellists at Sunday's minimum wage roundtable said that Singaporeans should be prepared to pay more for things like hawker food and cleaning services to help lift low-wage workers' income ($15 okay for bowl of ramen, but not more than $3 for hawker food?; Dec 2).

I beg to differ.

In existing privately run food courts, the price of a meal is already far higher compared with a typical hawker centre dish, but that has not translated to better earnings for low-income workers, such as food court cleaners.

The monthly pay of a top earner, when averaged out based on their annual overall remuneration package, can be several times that of the annual income of a low-wage earner.

Such a disparity is just mind boggling, and I can't help but wonder whether redistributing what top earners take home could, instead, uplift the salary of low-wage earners.

We should not just debate minimum wage and not talk about "excessive wage".

This is not to say that outstanding performers should not be rewarded.

However, the key question is whether the allocation of the pie for the top and bottom earners within an organisation and in society at large is equitable and justly apportioned.

The oft-quoted justification for raising the salary of low-wage workers is that it must be in tandem with a rise in productivity.

Should there be a higher weightage to how much one contributes to improving the productivity level of an organisation when considering top management's pay increments too?

Personally, I am willing to pay more, and believe a vast majority of Singaporeans are supportive of this too, if this will indeed uplift the living conditions of fellow Singaporeans.

However, paying more may not necessarily reduce the income disparity between low-wage workers and high-income earners.

As long as the current approach to uneven distribution remains without significant or bold changes, the low-income group will be left trapped in this vicious circle.

Aw Chon Wai

A version of this article appeared in the print edition of The Straits Times on December 06, 2018, with the headline 'Paying more doesn't solve income inequality'. Print Edition | Subscribe