Basic Income versus Living Wages in Singapore

26 November, 2019
By G-Team

Singapore is one of the highly developed countries in Asia Pacific, with a thriving economy and high quality of living but, wait there is no minimum wage?

A minimum wage or “basic income” as referred to in other countries is the lowest wage in which an employee can be paid. The minimum wage across countries varies and ensure that employees are sufficiently paid. There are around 193 United Nations member states that have a minimum wage system in place. However, Singapore is one of the few countries with no minimum wage. In fact, wages in Singapore are determined by the labour market demand and supply.

While minimum wages sets to provide employees with a “guaranteed” amount of wages, there is then the issue of welfare. In countries such as the United States for instance, welfare refers to the government support for citizens and residents of the society by providing a cash benefit to cover the cost of their daily necessities. In some countries, welfare provides free or subsidized supply of certain goods such as education or medical benefits.

The debate then arises - why would people want to work then if there is free money provided for them to live?

Perhaps one way to counter this is that by working, there is no limit to how much one can earn. After all, if wages are determined by an individual’s skills, capabilities and performance, then wages are likely to increase, albeit gradually, over the years. However, by simply relying on a welfare system, the amount of benefits received will be limited in quantity.

In Singapore, welfare is not “free” unlike other countries. However, there are numerous schemes targeted at the lower-income households and silver generation in terms of education and medical benefits.

While Singapore can afford a welfare system, given the economic development of the country, it is highly unpopular politically and there is also the fear of the eventual heavy reliance on welfare.

Regardless, welfare and minimum wages remain a hotly-debated topic even in other countries as well as in Singapore. Whether Singapore will eventually implemented a minimum wage across all industries or a full-fledged welfare system, only time will tell.

Posted in Payroll