Minimum wage threatens survival of small businesses
-
I REFER to the proposed GST increase from 5 to 7 per cent, to provide for those who are poor. There is indeed a pressing need to help lower-income Singaporeans caught in the globalisation tide.
Being a small-business owner, I can attest to this. I have many employees who earn less than $1,000 in basic salary and are the sole breadwinners (One such staff member hails from a family of 11). It is heart-rending hearing them bemoan the cost of living, utility bills, household expenses, etc. Much as I would like to pay them more, it is not possible to do so without affecting cost and the business' survival.
The minimum-wage argument is not tenable. Should employers be forced to pay a minimum wage, many like myself would choose either not to hire because we cannot afford it, or not to set up shop in Singapore. This will result in lesser employment.
I am glad the Government has heeded the call to take care of the lower-income. Workfare is unique to Singapore and is a far better principle than welfare. Under workfare, hardworking Singaporeans are given a chance to level up whereas welfare destroys all incentive to work.
It will take some time for Singaporeans to accept the GST increase. I urge everyone to take a measured and rational approach and to support it as it is designed primarily to help poorer fellow citizens. In order to make the reason for the GST hike more persuasive, I suggest the Prime Minister gives a full account of the two-point increase by Budget 2007 - what is the exact dollar value and how much of each dollar will go into workfare.
Theodore Yeo Guan Huat
(Straits Times 21 Nov) -
So we have two sides.
Raising the value of our human capital beats being a cost-primacy place. The latter is not progressive economics and certainly does not serve to improve our human development index and will doom us to being a slave to cost factors.
Why not instead focus on marketing ourselves as a premium workforce that is worth every penny that is paid?
-
Because singapore is a nation that strives only after numbers and efficiency. But at the expense of the human touch.
-
x2Originally posted by ditzy:Because singapore is a nation that strives only after numbers and efficiency. But at the expense of the human touch. -
It seemed the minimum wage is in place in Indonesia. The last time a visit by MM Lee proposed to the Indonesian govt to abolish the minimum wage thing.
-
do away with it... then you see the major corporations take advantage of it
what you do to one, impacts on the other...
then, ultimately it will be the guy trying to put food on his table who will end up having to have swill on his table instead -
hmm... how come hk is famous for having alot of small businesses? everyone wan to be a boss here...minimum wage theatens survival of small businesses??? why not we have a maximum wages for MP and their dogs?
-
not everyone needs to listen to the 'One' u know..Originally posted by will4:It seemed the minimum wage is in place in Indonesia. The last time a visit by MM Lee proposed to the Indonesian govt to abolish the minimum wage thing. -
but don't they practice minimum wage too? benchmarking with corporate salaries, the thing they would surely resist is maximum wage
-
all i can say is that if one can't pay another in term of wages, please dun call yourself a boss.
what is minimum wage? i equate it as to minimum effort for work to be done or carry out for. -
Premium workforce? so how much is a "premium" worker paid? So much to debate on... think only a portion of singaporeans qualify as "premium" workforce....Originally posted by LazerLordz:So we have two sides.
Raising the value of our human capital beats being a cost-primacy place. The latter is not progressive economics and certainly does not serve to improve our human development index and will doom us to being a slave to cost factors.
Why not instead focus on marketing ourselves as a premium workforce that is worth every penny that is paid? -
Small businesses will be better off, when minimum wage is introduced, as there will be at least a common level playing field that is applicable across the board - even amongst small players.
Is there any disadvantage for the Small Businesses with a minimum wage being introduced, when the advantage is for the Lower Income Singaporeans to at least earn the minimum wage for his own survival ?
Does the writer - who wrote in support of the 2% GST increase instead of a minimum wage - have the full appreciation of what damages the extra 2% GST will do to the economy ?
In this Tuesday - 21 November 2006 - edition of the Straits Times, several articles were published concerning the Singapore economy, one blowing the trumpet of a 7%-8% increase in GDP; a sperate article forecasting the slowdown of the global economy that will pull Singapore's economy back to 3%-4% growth; yet another report that say the increase in 2% GST will dampen consumer spending and further slow down the economy further in the face of a global slowdown; and yet another report that tried to explain for the sudden downturn in the Singapore Stock Exchange index despite the announcement of a glowing 7%-8% economic performance during the last 3rd Quarter.
One other interesting report - on the Human Side - had a 30 year old man, cheating to keep his two children (2 and 5 years) olf hunger, when all that they have is drinking condensed milk. Now that the man is jaild for two years, the police is investigating the wife's role in the cheating scam. If the wife is jailed, will Singaporeans have to bear the burden of looking after the two children in some social welfare home ?
It is totaly disingenious of this Government to explain that the 2% GST increase is intended to help the lower income Singaporeans.
If each Singapore household consist of 4 persons, the total population of 4.5 million will form ONE MILLION household; and if each household has a total monthly expenditure of ONE Thousand Dollars, the 2% GST increase will mean a total GST collection of $20 per household per month.
ONE MILLION household will net the Government 20 MILLION DOLLARS PER MONTH, or S$240,000,000 (two hundred forty million) a YEAR.
Will you believe that the entire sum of S$240,000,000 will go to the Lower Income Group in Singapore ?
What is the size of this Lower Income Group in terms of actual numbers counted ?
If the Government is truly interested in helping the poorer Singaporeans, the amount of annual surplus revenue monies that have been transferred ANNUALLY from the Ministry of Finance to GIC and Temasek - would be more then enough, considering that Temasek and GIC have already their own surplus funds from their operating profits.
Why will this government continue to suck up the PRIVATE MONIES of Singaporeans through a plethora of ingenious taxes, when all the Government Linked Companies are report glowing annual reports ?
This increase in 2% GST can hardly be justifiable, when there do not exist even a MINIMUM WAGE for Singaporeans. -
What do you think are the reasons that small businesses can't pay a higher wage rate?
It's "their policy" of taxing the lower and middle income earners more instead of the
higher income earners
Higher income earners have more disposable income, if they make a million a year, after
taxes of 20%, they will be left with $800,000 a year. They won't spend everything, they
will most likely save a large substantial portion of this. High propensity to save (save
more)
Low income earners have less disposable income, if they make $20,000 a year, after CPF
contribution, they will be left with $16,000, with the $16,000 they have left, they
are most likely to spend everything on perishables and necessities. After the GST, they
will only have like $15,238 left. Low propensity to save (save less).
When you spend more and save less, you tend to stimulate the economy.
Assume you save only 5% (low income earners) of your income.
ABC spends $100 in DEF's shop, DEF spends $95 ($100 x 95%) in GHI's shop, GHI spends
$90.25 ($95 x 95%) in JKL's shop, JKL spends $85.74 ($90.25 x 95%) in MNO's shop, ....
If you add up total income = $100 + $95 + $90.25 + $85.74...............
It will add up to $2,000 = $100 / 0.05
When you perform this with a savings of 50% (high income earners).
You will get $200 = $100 / 0.50
This means less income will be generated.
The growth of our economy was based on Solow's model of savings and growth. That's why
CPF still remained despite the completion of our MRT project. But as the economy matures
to a stage, I think it would be counter productive to have too much savings.
Pre-mature economy (low savings):
1 computer (capital stock) to 1,000 people
Mature economy (balanced savings):
1,000 computer (capital stock) to 1,000 people
Mature economy (high savings):
1,000,000 computer (capital stock) to 1,000 people
Having too much capital will bring diminishing returns, because you can't utilise the
capital efficiently. That's why you see earlier in the year, Singtel did a share buyback,
so they can return excess capital to shareholders as they can't find good investments.
I don't understand why they always have to have a budget surplus, sometimes a balanced
budget, or a slight budget deficit will be more favourable. I think it should only be right
that you tax the higher income earners, as they make more money, they should return to
the society what they have taken.
Maybe to enticed multi-national corporations here, they can use tax incentives.
Instead of cutting the top bracket of income tax to 20% for all income tax payers.
They should distinguish between public listed company (with a certain capital and turnover)
and non listed (privately owned enterprises) -
Dear Squiggly, do not underestimate this "premium" workforce. Everyone can qualifies himself as one.Originally posted by Squiggly:Premium workforce? so how much is a "premium" worker paid? So much to debate on... think only a portion of singaporeans qualify as "premium" workforce....
The professionals can move abroad to practise their skill. The under skilled ?
Remember in the 80's the Koreans were here in the construction sector ? Even now,many mainland chinese, indians are moving out of their respective country to another. Unskilled Singaporeans too, have a choice if they are willing to bite the bitter pill and move on to another country in search of a better future. Always remember our forefathers are too immigrants before.
Of course. Should this happens,this will be very sad for Singapore as a nation. I pray not but will not be surprised if the gahment continue not to heed the public whingeing on rising cost and the widening disparity between the elites and middle class.
-
ur saving e.g is just like mine that i gave to a of my lover...Originally posted by maurizio13:What do you think are the reasons that small businesses can't pay a higher wage rate?
It's "their policy" of taxing the lower and middle income earners more instead of the
higher income earners
Higher income earners have more disposable income, if they make a million a year, after
taxes of 20%, they will be left with $800,000 a year. They won't spend everything, they
will most likely save a large substantial portion of this. High propensity to save (save
more)
Low income earners have less disposable income, if they make $20,000 a year, after CPF
contribution, they will be left with $16,000, with the $16,000 they have left, they
are most likely to spend everything on perishables and necessities. After the GST, they
will only have like $15,238 left. Low propensity to save (save less).
she's earning around HKD8K per mth... and after her minimum expense of 5K and gave her mum some money.. i estimate her mthly saving is 1K (which u know char bor one lah.. sometime will just spend and so zero saving)
my earning.... ok ok lah.. let say i can save about HKD20K per mth .. so.. my saving is 20 times of hers EVERY mth...
that mean... in 1 yr.... her saving vs my saving = 12K vs 240K ... which is still 20times less than me.... not alot right... but.... that mean.... i am save in 1 yr what she can save in 20YEARS!!! .
oh ya.. and my salary is not 20 times hers only.. maybe just 3 or 4 times only...but the different is so big lor.... so there u go.. the rich get richer and the poor get poorer lor....
p.s. and pls dun give mi those sh.it about earn more spend more ok.. it's ur own choice!!!!!!!!! no one force u to buy big house big car hor!!!
-
There is no legal minimum wage in Hong Kong. The prevailing wage is the result of interplay of commercial forces....basically supply and demandOriginally posted by I-like-flings(m):hmm... how come hk is famous for having alot of small businesses? everyone wan to be a boss here...minimum wage theatens survival of small businesses??? why not we have a maximum wages for MP and their dogs?
A minimum wage will see labour costs go up and that will translate into higher living costs for all.. -
are our ministers' having minimum wage?
they will not accept anything less than what they think they deserve. -
I cannot understand why if min wage can translate into higher living costs, increase in GST will not. How does increase in GST help the poor??Originally posted by oxford mushroom:A minimum wage will see labour costs go up and that will translate into higher living costs for all..
-
Wah!!! You've become a plagirist!!! So smart can quote from Wikipedia!!!Originally posted by oxford mushroom:There is no legal minimum wage in Hong Kong. The prevailing wage is the result of interplay of commercial forces....basically supply and demand
A minimum wage will see labour costs go up and that will translate into higher living costs for all..
http://en.wikipedia.org/wiki/Employment_in_Hong_Kong
For your information, the trade unions in Hong Kong are not government institutions, there is no conflict of interest, unlike Singapore where the trade unions are government bodies. The trade unions in Hong Kong can negotiate wages for it's worker's interest.
First of all minimum wages guarantees a minimum living standard for the poor.
Secondly, our supply of labour is always increasing, with imports of "foreign talents" from China, India, Philipines, Indonesia, etc. Singaporeans are not able to compete with imported labour from those regions. If those labourer saves SGD 100 and remit it back to say China, it will translate to RMB 500, with the RMB 500 he can support a family. The same SGD 100 given to say the labourer's parent (only 1 parent) will last only 10 days at best.
We are not playing on a levelled playing field. -
not having minimum wage is the result of greedy enterprises with an inward looking govt. transport companies have been raising fares despite being deep in profits, are the workers paid better?Originally posted by oxford mushroom:There is no legal minimum wage in Hong Kong. The prevailing wage is the result of interplay of commercial forces....basically supply and demand
A minimum wage will see labour costs go up and that will translate into higher living costs for all..
costs of living have been rising but wages for majority remain flat...
the interplay of commercial forces is another fallacy, as i pointed out in another post, the market markers determine who gets what and usually they pay themselves first and excessively, and what scraps that are left are then distributed to those below.....
that said, minimum wage is about social responsibility that your fellow man do not unnecessarily suffer........ -
Hundreds of Economists Say:Raise the Minimum Wage
Over 650 economists, including 5 Nobel prize winners and 6 past presidents of the American Economic Association, believe that increasing federal and state minimum wages, with annual cost-of-living adjustments for inflation, “can significantly improve the lives of low-income workers and their families, without the adverse effects that critics have claimed.” -
Originally posted by googoomuck:Hundreds of Economists Say:Raise the Minimum Wage
Over 650 economists, including 5 Nobel prize winners and 6 past presidents of the American Economic Association, believe that increasing federal and state minimum wages, with annual cost-of-living adjustments for inflation, “can significantly improve the lives of low-income workers and their families, without the adverse effects that critics have claimed.”
too bad they are not my gov. 
-
A minimum wage may not work very well for Singapore right now, especially since a sudden change will not please foreign investors and with current attitudes / lack of graciousness on ALL levels of society.
I foresee one problem arising with non-skilled work - minimum wage set, but non-adhereing employers resisting the change (small businesses in particular).. and MOM having difficulty enforcing it.. It may very well turn into a widespread, ugly race of whoever's cheaper gets the job. I also foresee an increased demand for "FTs" and resentment towards this group for "spoiling the market".
I do not feel that Singapore is ready for such an undertaking at this moment. It is already difficult enough as it is for a worker to have MOM take action against errant employers with the current set of worker "protection" laws.
I do, however, feel that a minimum wage would only work when truly INDEPENDENT workers' unions are in place (without their hands tied). This would ensure real needs are addressed without too much compromise on the part of the worker in favour of the ONE party policies. Empower the workers with rights and an EFFECTIVE avenue to pursue a course of action against errant employers.. THEN have the union/s gradually negotiate minimum wage when there is enough respect for the individual worker. Then it might just work.
As for GST, it's truly ludicrous to justify the increase as a way to help the poor. If the poor were truly meant to be the receipients of such a 'noble' cause, then why tax all across the board? Why not apply the tax increase to luxury goods only? -
The government intends to distribute the additional GST revenue to the poor in the form of various new packages to be announced. Higher pay in relation to minimum wage will go to the worker and his family, not the unemployed.Originally posted by sgdiehard:I cannot understand why if min wage can translate into higher living costs, increase in GST will not. How does increase in GST help the poor?? -
Businesses will move their work somewhere else where it is cheaper to operate. CEOs and investors want handsome returns, by all means possible within the law.Originally posted by countdracula:not having minimum wage is the result of greedy enterprises with an inward looking govt. transport companies have been raising fares despite being deep in profits, are the workers paid better?
If transport companies are not earning profits, they will fire workers. You only have a job if your company is earning money. If your boss can earn more money by hiring a FT, why should he employ you?