The minimum wage: Let’s have a grounded discussion

March 25, 2014
Singapore Democrats

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Jeremy Chen

The PAP and its supporters routinely make ideologically based claims that are supported by hypotheticals but not by real evidence (especially statistical evidence). One example is the topic of introducing a minimum wage, an area of contention where PAP claims are more ideological than logical. In this discussion, the PAP has been particularly long on hypotheticals and very short on specifics.

In the domain of mathematics, it is well known that one can prove anything one wants about “elements of the empty set” because there is nothing in there. (For instance, the following statements are true: (i) all elements of the empty set are greater than 1, (ii) all elements of the empty set are less than 0, and (iii) all elements of the empty set are made of green cheese.) Similarly, one can make any claims about classes of businesses or workers to which nothing belongs and have those be tautologically true. But such claims add nothing to the public discourse and serve only to mislead.

So let’s be grounded in our discussion. We propose that a supply chain (or part of a supply chain) that operates in Singapore and cannot afford to pay its Singaporean workers a living wage (say about $7/hr) is not productive enough to be operating here. This is a reasonable point to begin our discussion. Singapore is a space-bound nation and unproductive commercial businesses should not be operating here and taking up that space (not that their cashflow would support it for long anyway).

The question, then, is whether the above proposition is reasonable. We put it forth as a possible starting point and are open to reviewing our position should reality throw up relevant facts we have not considered. We challenge the PAP to offer REAL and SPECIFIC examples of for-profit businesses that should be operating in Singapore but are unable to offer such a wage. If such examples exist, they should be easy to point out. No pointless hypothetical, please.

There is an alternative formulation to the above question: We ask that the PAP cite an example of work that should be carried out in Singapore but is not worth $7/hr. Let us be precise with regards to what “worth” means. Such “work” would serve some people or organizations. In the event that such work is withheld by all suppliers unless $7/hr is paid, would those customers be willing to fork out $7/hr or decide to forgo it altogether? If those customers, acting as clinically rational economic agents, are willing to fork out $7/hr, then it is worth at least $7/hr to those customers, and hence has a market value of at least $7/hr.

So in this discussion of the minimum wage (and other policy discussions, for the matter), let us all be grounded and work with real examples. This way, can we move forward and contribute positively to public discourse.

Jeremy Chen is pursuing his PhD in Decision Science at the NUS and is a member of the SDP’s housing policy panel.