Government will uplift low-wage workers: PM Lee
SINGAPORE: Prime Minister Lee Hsien Loong has promised the labour movement that the government will always do its best to uplift low-wage workers and help them earn more.
Speaking at the May Day Rally on Tuesday, Mr Lee said this must be achieved through sustainable improvements and not through a big risk with short-term jumps.
He said the plans include implementing the Inclusive Growth Programme, which has now been increased to S$100 million, to upgrade 100,000 low-wage workers.
There are also substantial fiscal transfers to low-wage workers and their families through GST Vouchers, Workfare and the Special Employment Credit.
Mr Lee said over a lifetime low-income households will get more than S$500,000 in government subsidies.
Nearly 1,500 unionists, employers and government leaders gathered at their annual May Day Rally.
Mr Lee said Singapore has made good progress in recent years, but while macro conditions are good, workers have become anxious.
Unionists have voiced concerns over issues such as the cost of living, especially in health care.
The plight of low-wage workers is also on their minds, as discussions take on a new complexion after the former chairman of the National Wages Council (NWC) floated an idea to drastically push up the wages of low-wage workers.
Mr Lee warned against quick solutions, and explained why the idea won’t work.
“Professor Lim Chong Yah recently proposed pushing up low wage workers’ wages quickly – 50 per cent in three years. I appreciate his good intentions. I share his concern over this group of workers but I do not agree with his drastic approach. The only realistic way is to move step by step, with wages and productivity going up in tandem together as fast as we can but as fast as is possible.
“In the early 1980s, we did have one period when we zoomed up and pushed wages up rapidly. But even then, we ran into problems. Wages shot up but productivity didn’t improve and we lost competitiveness. So in 1985, when the winds changed and when conditions turned difficult, we plunged into a very deep recession. It was scary.”
Mr Lee also explained the effect of higher wage increases on small and medium enterprises. He said they too are affected by wage increases. That’s because they also employ many low-wage workers and as a result, may end up passing on the costs to consumers.
Mr Lee said low-wage workers will end up worse off if wages go up sharply and are not matched by improvements in productivity.
“Union leaders understand this but they are under pressure because the proposal has been widely discussed and raised expectations and so it is important for me to spend some time today to explain to you why we have to move carefully; why a drastic approach will not work; and why we should not confuse workers,” Mr Lee said.
“(It is) better to aim for what is sustainable and don’t take a big risk with short-term jumps in wages. I promise you we will always do our best to uplift low-wage workers and we have many programmes doing that.”
Turning to the issue of foreign workers, Mr Lee noted the different perspectives of employers and workers.
Employers cannot find enough Singaporean workers, especially those who’ll stay on the job and for Singaporean workers, the presence of foreign workers adds to competition, reduces wages and takes away jobs.
Prime Minister Lee said both arguments are valid but only up to a point.
“One of the unionists asked me: how many foreign workers do we need? I said there is no magic number. It depends on the economic opportunities. In a good year, you want to allow a few more to come in. In a slow year, we can tighten and let some of them go off but it also depends on our own needs,” Mr Lee said.
But he said the inflow of foreign workers has to slow down significantly in the coming years, as Singapore cannot keep on bringing in 80,000 foreign workers a year.
“Companies are already feeling the squeeze. It gives them the incentive to upgrade their productivity and to develop a Singaporean core in their companies (and these are) people who will form the long-term skills, the long-term loyalty and long-term capability for the companies and Singapore,” Mr Lee said.
“While we must always be open to the world, let me be quite clear – Singaporeans will always be our priority. This is the purpose of all our policies, including on foreign workers and talent. We are trying to seek the maximum advantage for Singapore and Singaporeans.”
Mr Lee’s challenge to the tripartite partners is to make Singapore the first choice for investments and talent; and ensure that citizens enjoy better jobs, better pay and better lives.