Is the WIS effective in the first place?

Singapore Democrats

Income disparity has been widening for the past 10 years. The poorest of our poor have seen their incomes diminish for just as long. Then just before the next general elections PAP MPs pop up one by one to talk about the plight of low-income workers.

Singaporeans were treated to this spectacle in Parliament on Monday where no less than 15 MPs took to the floor to express their concerns about the poor. But not a single one of them came up with a proposal to level up society.



Instead they attacked the idea of Minimum Wage while extolling the virtues of their party’s Workfare Income Supplement (WIS) scheme.

If Minimum Wage is such a bad idea and WIS such a good one, why is there the necessity to repeatedly promote one over the other? This week’s 5-hour parliamentary denunciation of Minimum Wage is not the first time the Government is attacking the policy. Nor, one suspects, will it be the last.

Indeed why the anxiety over the WIS scheme? Could it be because it is not effective? Let’s look at some indicators: 

  • WIS was implemented in 2007. In 2008, the average household monthly income change for the poorest 10 percent barely registered a pulse – 0.1 percent increase from the previous year. Compare this to a 6.3-percent-increase for the richest 10 percent of families in Singapore.
  • In 2009, those living in 1- and 2-room flats, the poorest segment of society, saw their median household incomes plunge by -13.8 percent from 2008. These households include those with no working persons. Even those 1- and 2-room households with working persons saw their median incomes decrease by -8.9 percent. Compare this to those living in condominiums and private houses, the decrease was only -1.1 percent. 
  • Among households with working family members, the poorest 10 percent in our society saw a decline of -3.8 percent decline in average wage per household member – the biggest drop compared to the rest of the population (see here).

If WIS is as effective as the PAP makes it out to be, why are lowest of our low-income workers seeing their household incomes fall – and for that matter fall the most drastically – even after its implementation?

The rationale is problem

Not only is the effectiveness of the WIS in question, the rationale of the scheme does not address the problem: That wages, especially those in the lower-income groups, are suppressed and workers are not paid their due. The rationale of WIS, as stated on the
Manpower Ministry’s website, is:


The Workfare Income Supplement (WIS) Scheme was introduced in 2007 to supplement wages, encourage older low-wage workers to work regularly and build up their CPF savings. (emphasis added)

The problem is as the name of the scheme suggests: It is only a supplement to a worker’s income. When an entity needs supplements, it means that its basics are not met.

This is where the Singapore Democrats make our fundamental objection to the PAP’s scheme: Every Singaporean, old or young, who puts in full-time work must be paid a wage that would allow him/her to meet basic living expenses – housing, food, transportation, medical care – and have something left over for retirement.

Something is seriously wrong with an economic system when workers working full-time cannot earn enough to meet their basic needs and have to resort to supplementing their wages through income schemes.

In Singapore, workers are paid inadequately (meaning they are exploited) and then they are told that they can apply for supplements.

Why can’t there be legislation to prevent such exploitation? Do workers not have a right to demand salaries that are the bare minimum, commensurate with the cost of living, to allow them to live in dignity and security? After all, our ministers make the same argument for themselves, with the difference that they want much more than they will ever need in life. 

The SDP’s proposal of Minimum Wage makes the crucial difference – we want Singaporean workers to be paid what they are entitled. They should not have to apply for supplements.

We will discuss the merits of the Minimum Wage and respond to the PAP’s criticism of it in a subsequent post.

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