Photo of Josephine Teo from The New Paper

When questioned by the audience why Singapore does not have a Minimum Wage to help the poor, Manpower Minister Josephine Teo claimed that Minimum Wage is destructive and would lead to unemployment and illegal hiring:

“Implementing a minimum wage in Singapore to address concerns about inequality could ultimately lead to lower levels of employment and workers turning to illegal jobs.”

The S$1.1 million-a-year PAP Minister then claimed that Minimum Wage is a form of tax for employers:

“A minimum wage may force employers to pay more than the market rate for some types of labour. This will result in a tax effect, with lowest-waged workers attracting the highest tax. Not all employers would want to employ workers at this rate, which could lead to lower levels of employment. To secure jobs, some workers may choose to work illegally below the minimum wage, which makes them even more vulnerable.”

The PAP Minister then defended her employment policies saying that low-income workers are well-paid by the government and that she has “achieved the same effect as Minimum Wage”:

“We have instead implemented measures such as the Workfare Income Supplement, a scheme that tops up the income of low-wage workers, thereby achieving the same uplift as a minimum wage. But there’s a crucial difference – the cost is borne by the Government, with no risk of inducing unemployment or illegal employment of such workers. The Progressive Wage Model (PWM) could also be a better solution to increasing wages sustainably. Unlike minimum wage which specifies a floor, PWM specifies a ladder. In fact, there are four inter-linked ladders for skills, jobs, productivity and wages. Under PWM, a worker can be paid a higher wage on the basis of his improved skills, enlarged job or heightened productivity. The rungs of the ladder provide an upward path, so the worker is not stuck earning minimum wages.”

This is however untrue as the average low income worker in Singapore takes home about S$4.50 an hour, as compared to Australia’s S$20 an hour Minimum Wage.

Expressing her opposition against a Minimum Wage, Minister Josephine Teo then said all she heard were negative effects in her overseas trips:

“During my visit to Hong Kong, soon after a minimum wage was implemented, she learnt of an elderly condominium security officer who was displaced by a younger person. The building management had expressed a preference for the younger employee for the same minimum wage.”

Minister Josephine Teo then dismissed the state of worsening inequality in Singapore, saying that rising income inequality is a result of “success”:

“This is a problem of success. It is because a system has been built up to enable large swathes of people to move up to middle or to upper middle … and this group has expanded. With each successful cohort, the parents want to expand on that advantage. It’s something that is very difficult to overcome.”