Minimum wage and cost of living

Several people have argued that a minimum wage will increase the cost of living further. This is true, but the impact will not be as large as feared.

Wages is only a part of the total cost of business operations. The other costs are rental, government levies and profit margin. Many workers now earn more than the minimum wage, so the increase in wage cost will only apply to the workers who now earn less than the minimum wage. This increase will not be significant for most businesses, except those that depend on low income workers.

Even if the wage cost increases, the price charged to consumers may not increase to the same extent. Businesses have to meet competitive pressures. If they are squeezed, they will have to pay lower rental on their business premises and reduced profit margin. The increase in wages will be partly offset by the reduction in these other costs.

In countries with a minimum wage, the property prices are at a more reasonable level (in relation to average earnings) compared to countries with wide disparity of income.

A minimum wage policy reduces the disparity of incomes and will lead to a more fair and stable society, which will lead to better long term growth.

Tan Kin Lian

Speaker's Corner - Singaporeans vs Foreigners

ALEX TAN'S TALK IS TODAY, AT 5 PM, AT SPEAKERS CORNER


Hi Mr Tan Kin Lian
 I will be conducting a speech on the topic "Singaporeans" at the Speaker's Corner on the 2nd day of Chinese New Year.

Date and Time: 15 February 2010 5 pm
http://www.facebook.com/inbox/?ref=mb#/group.php?gid=153492722129&ref=ts


Your support would be highly honored and appreciated.

Yours sincerely
Alex Tan

Minimum wage and cost of a maid

Some people argued for a minimum wage to be implemented in Singapore. REX argued against it, stating that the cost of a maid would increase to $1,500 a month, if a minimum wage is applied here.

I do not think that a minimum wage need to be as high as suggested by REX. It could be set at $1,000. If we consider the wages, government levy, food and lodging provided to a maid, most employers are already paying close to $1,000 a month.

If we pay a higher wage for a maid, we will get a better quality maid, which may be better in the long run. There is also a high cost in replacing a maid. Under the current system, many employers have to replace the maid quite often and suffer this additional cost.

We should not allow the higher cost of employing a maid affect our thinking towards paying a decent wage to other workers in Singapore who need to earn enough to pay for the high cost of living in Singapore.