What if the government suddenly decided to listen to the calling of Roy and HHH and suddenly decided to implement minimum wage? Here's what might happen. Let's start from the bad side.
1) Employers will be hit hard. In order to try to stay in business, they cut down the number of employees and overload the work to the rest that are remaining. For employees, it's either lose a job or stay in job and do more work. Either way, prices of things are going to rise (see 3).
2) They wind up the business if they cannot cope with the increased cost, their employees lose their jobs as a result. More people will go jobless.
3) They increase the price of their products to make up for the increased cost of operation. Singaporeans earn more money but pay more for goods and services as a result.
Now the good.
1) Employees have more money, they spend more.
2) Businesses do well because people are spending more, they hire more people.
3) More jobs and more pay for everyone.
With that said, minimum wage isn't necessarily a good or bad thing. It's how the government monitors it and make it happen that matters. The government should help businesses to do well and people to get better pay. Minimum wage is not going to work if commercial rental prices is going to remain high, because once businesses do well their dear landlords would increase their rent and hence cost of operation. Minimum wage would be useless if people are not getting an increased spending power.
For a start they should probably control the commercial property market to prevent the rich organizations from monopolizing it.
Neo Ren Jie
TRS Contributor