Firms with foreign workers to pay local staff at least S$1,400 Koh Poh Koon said minimum wage ca...

Prime Minister Lee Hsien Loong noted in his National Day Rally 2021 speech that the government has accepted a tripartite workgroup’s recommendations to help lower-wage workers more, which includes mandating companies that hire foreign workers to pay all their local employees a local qualifying salary (LQS) of S$1,400.

Companies were previously only required to pay a local qualifying salary to some local employees, depending on the number of foreign workers they hire.

This in a way, makes the new scheme a form of minimum wage for local workers.

Back in October last year, Dr. Koh Poh Koon, then- deputy NTUC sec-gen had rejected Workers’ Party’s (WP) proposal of implementing a minimum wage of S$1,300.

During his speech, Dr Koh claimed that minimum wage could be a disadvantage to the lowest-skilled and most vulnerable workers as it is difficult to find the right value; that it could possibly become a political tool.

He added, “In a political contest, a political party will surely come along and say, well, S$1,500 will reflect a higher ‘moral imperative’. Yet another will come along and say, S$1,300 is good, S$1,500 is better, but S$1,700 must surely be more divine ‘moral imperative’. It can become a political auction.”

Assc Prof Jamus Lim during the debate said,

"It is worth reminding ourselves that there was a time in the 16th century, when people believed that the sun revolved around the Earth. But that belief is not in fact the same as evidence and all evidence from countries all over the world demonstrate that a Minimum Wage has minimal impact on unemployment as long as it is not set too high.

So, that leaves us with discussing why, what is too high? And again, I think we made a clear justification on why we believe that $1,300 is a justifiable number. But why we believe as well that it is important to be open to other possibilities is because we, likewise, do not want this number to be politicised. There are lots of numbers that can be politicised, the interest rate can be politicised."

Firmsforeignworkers