Singapore disputes interpretation of minimum income standards

Three government ministries have questioned the findings of a new minimum wage study, saying that its research parameters are flawed
By: | September 18, 2023
Topics: Compensation and Benefits | Employee Experience | Employment Law | News | Singapore

Singapore’s Finance Ministry (MOF), Manpower Ministry (MOM) and Ministry of Social and Family Development (MSF) has issued a joint statement to question the validity of a report that, among other findings, called for the introduction of a universal wage floor.

According to the report’s authors, Dr Ng Kok Hoe, Head of the social inclusion project at National University of Singapore’s Lee Kuan Yew School of Public Policy; and Associate Professor Teo You Yenn, Provost Chair in sociology at Nanyang Technological University, the “reasonable starting point” for a living wage in Singapore in 2023 is SGD $2,990 (USD $2916.07, an increase from the SGD $2,906 (USD $2,134.38) they recommended in 2021.

The ministries, however, have disputed the proposed salary amount, saying that instead of accurately reflecting the cost of basic needs, it takes into account items and expenditures that may be termed as luxuries.

Dr Ng and Professor Teo also called for the Central Provident Fund (CPF) – Singapore’s compulsory savings and pension plan for employees – to be tweaked to provide more protection for poor elderly people, and to peg assistance schemes to current prices of goods and services.

The ministries, while declaring their support for providing jobs that pay lower-wage employees decently, claimed that a universal wage floor was not the best solution to achieve this goal.

“Set too low, the wage floor will benefit fewer workers than the Progressive Wage Model (PWM). Set too high, workers who are less-skilled risk losing their jobs, especially if their jobs can be automated,” the ministries explained.

READ MORE: Optimism prevails as employers in Singapore commit to wage increases

PWM is a scheme designed to increase the wages of employees through upgrading skills and improving productivity.

The ministries also questioned the approach the research used to derive its findings, including a dependence on respondent profiles and focus groups that comprised higher-income participants, according to CNA.