Is the WIS effective in the first place?

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Friday, 14 January 2011

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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Comments (16)

Fri 14 Jan 2011 11:08 AM | BryanT - Throw futile pot-shots from without, duly.

There has been enough being aired about MinWage and WIS. So there are diminishing returns for me to add on to this debate. So I would just want to point out the obvious fallacy in what SDP says here.

SDP states “that wages, especially those in the lower-income groups, are suppressed and workers are not paid their due.”

I wonder how SDP can perceive MinWage, which is a totally ARTIFICIAL means to jack up salaries, as a means to pay workers their DUES for what they do.

If the wages are being held back due to particular government policies or other social-economics circumstance, then SDP should propose the means to counter these. It can also suggest measures to enhance the value of the work of those who are lowly paid. Then these workers would deservedly be awarded higher and due wages.

What SDP has done is to bark up the wrong tree (again).

By the way, the reason why “PAP MPs (can) pop up one by one to talk” about WIS and MinWage, together with some from the Opposition, is because they are legally seated in Parliament.

In case SDP is still not aware, or feeling a tad envious, that is what people normally do in a Parliament sitting.

SDP is probably feeling very much left out because it has consistently not only been unable to win seats in Parliament, it has done so badly at GEs that its candidates can't get offered NCMP seats in recent elections.

There will be up to nine of these on offer this time round. But I suspect that SDP is not interested in these, and would rather throw futile pot-shots from without, as it has been doing for decades.

Fri 14 Jan 2011 8:55 PM | Cheers

Would appreciate if ByranT can show me the link where min wages viz workfare was debated.

The last I know PAP could not even sent someone to debate with opposition on the Face To Face Forum organised by TOC.

Why would Philippine govt negotiate for min wage for their workers overseas?.
Is this artificial means to jack up salaries, as a means to pay maids what their dues in what they do?
Maids salary includes, food and lodging,

Fri 14 Jan 2011 10:41 PM | BryanTi - My Alter ego - a forgetful empty vessel!

My alter ego Bryan T,

You said:

"If the wages are being held back due to particular government policies or other social-economics circumstance, then SDP should propose the means to counter these. It can also suggest measures to enhance the value of the work of those who are lowly paid. Then these workers would deservedly be awarded higher and due wages.

What SDP has done is to bark up the wrong tree (again)."

You know, the funny thing is, there is something called the Alternative Economic Program that the SDP has come up with, and it has a comprehensive plan to develop our economy and move it away from the PAP model (which relies on cheap foreign unskilled labour to boost GDP). Of course, you may choose to buy it online but knowing you are very protective of your identity you won't. Hence you choose to criticize and milk this issue for all its worth here.

Secondly, you said:

"By the way, the reason why “PAP MPs (can) pop up one by one to talk” about WIS and MinWage, together with some from the Opposition, is because they are legally seated in Parliament.

In case SDP is still not aware, or feeling a tad envious, that is what people normally do in a Parliament sitting."

For all the huff and the puff you seem to have an understanding that only extends to a 3km radius from your plush home. Some countries like Iran, Egypt, Uganda and even Zimbabwe have parliaments too. But their parliaments are like Singapore's: enough said. Legal as they may be in the eyes of the rulers (who, coincidentally, set the law as they wish), any sitting in Parliament has nil effect on things, and election is stage managed to return these servants of the party to power.

You see, my alter ego BryanT is very good at huffing and puffing like a big bad wolf and conveniently forgetting to mention these important points! Forgetful empty vessel indead! Perhaps he should invest in the notebook to offset these memory lapses!

Fri 14 Jan 2011 2:04 PM | PAP Voter

I seconded the SDP proposal on Mininum Wages For Worker, otherwise, the worker will be tempted to be corrupted or moon-lighting or rob or cheat for the needed money to survive. Without the mininum amount of money needed monthly, how do you expect the worker to work with passion or work well in the job? Workers also have pride with themselves and do not like to ask or beg for hands-out.

Do you know how many workers working a full time job from 8.00 am to 6.00pm, Monday to Saturday with alternate Sunday Off are paid only S$750.00 monthly in a so call first world country Sinkapor? How do you expect them to live well here in a first world country?

I suggest that if employer business cannot survive with the MININUM WAGES AS SUGGESTED should apply to the WIS from the government for hands-out for survival.

Let's joint hands to petition the government to consider implimenting the MININUM WAGES FOR WORKERS. Otherwise, vote them out of SINGAPORE altogether for MPs who care and with PASSION and HEART for their Singaporean citizens instead of MPs who paid themselves MILLIONS to stay out of corruption and expected workers to beg for hands-out from the government for survival.

PAP government was very good for the first 30 years, then on it gradully degraded to bad and now getting worst. MONEY IS THE ROOT TO ALL EVIL.

Fri 14 Jan 2011 3:10 PM | Cheers

Agree with you PAP Voter.

Nothing wrong with money and money is not the root to all evil.

It is the LOVE of money is the root to all evil.

Fri 14 Jan 2011 11:06 PM | quantum - Minimum and Maximum

No minimum wage for the people, and no maximum wage for the PAP.

Fri 14 Jan 2011 11:43 PM | Tan Tai Wei

BryanT,

In a "free economy", market forces operate in determining wages, and they do not necessarily reflect who and what work "deserve" how much. Therefore, SDP's oft repeated point that over-supply of labour, because of government's artificial importing of labourers, have suppressed wages. So, the low wages do not measure the intrinsic worth of their labour (How does one measure this, in any case?)

"Minimum wage" is SDP's suggestion for countering this "artificial" situation.

Fri 14 Jan 2011 11:48 PM | Buwakasha

"No minimum wage for the people, and no maximum wage for the PAP."

EXACTLY.

Pap Voter: I think your conclusions are not sound. Yes, workers are underpaid, but minimum wage does not mean pay them more, it means if you want to hire them, you HAVE to pay them more. Employers can choose to not hire, and you have unemployment. To really understand the impact, just think about this. If minimum wage law works at $5/hr then why not make it $500/hr? Does it mean that if we raise it to $5000/hr, every worker will suddenly be millionaires overnight?

Sat 15 Jan 2011 12:36 AM | AhKow - BryanT's classic Pot calling the kettle black -- a

BryanT: "I wonder how SDP can perceive MinWage, which is a totally ARTIFICIAL means to jack up salaries, as a means to pay workers their DUES for what they do."

And Workfare is NOT ARTIFICIAL?

BryanT: "If the wages are being held back due to particular government policies or other social-economics circumstance, then SDP should propose the means to counter these. It can also suggest measures to enhance the value of the work of those who are lowly paid. Then these workers would deservedly be awarded higher and due wages."

Er.. when SDP suggests minimal wage, this is not a counter proposal?

Hmm, Ministers and PAP MPs can determine how much they pay themselves Not Artifical?

BryanT: "What SDP has done is to bark up the wrong tree (again)".

His classic complain is that SDP don't deal with bread-and-butter issue. Now they do, he says the SDP is barking up the wrong tree?

Hmm, now who is the one that is barking mad?

BryanT: "By the way, the reason why “PAP MPs (can) pop up one by one to talk” about WIS and MinWage, together with some from the Opposition, is because they are legally seated in Parliament."

Hmmm, PAP invited to speak at TOC forum but dare not go. SDP speak in TOC with no Parliamentary immunity and having their policy challenged by anyone. PAP can only speak under Parliamentary immunity and only debate with their own kind.

Conclusion: PAP no balls to defend their own policy.

BryanT: "In case SDP is still not aware, or feeling a tad envious, that is what people normally do in a Parliament sitting."

Hmm, SDP and everyone outside have been talking about Min Wage. Even bloggers, not Lucky Tan, too. Only now than Parliament start taking? Who is the one envious?

BryanT: "SDP is probably feeling very much left out because it has consistently not only been unable to win seats in Parliament, it has done so badly at GEs that its candidates can't get offered NCMP seats in recent elections."

Hmmm, not offered seat in Parliament but still not stop talking. PAP offered seat and paid so much and only start to talk about the issue?

Yes, I think it is good for SDP to be envious so they can work harder and let the fat cat PAP become complacent!

BryanT: "There will be up to nine of these on offer this time round. But I suspect that SDP is not interested in these, and would rather throw futile pot-shots from without, as it has been doing for decades."

SDP throwing pot shots. Now let's see what BryanT is doing here? To use his own words in his previous comments -- to agitate (read "violance") -- against the SDP!

Sat 15 Jan 2011 7:13 PM | quantum - 100% employment & or 100% slavery?

What is the point of having 100% employment in which everyone is paid only 1 cent a day?
This is not right, this is just exploitation, plain and simple, packaged with beautiful English languaage into something called "100% employment". Lets not create slaves in Singapore, let's move forward and progress.

Sun 16 Jan 2011 8:06 AM | Buwakasha

quantum:- But you are not paid 1 cent a day right? However, if I were your employer, I wish I can pay you 1 cent a day. You would too if you were an employer. However, I can't and you can't not because of a minimum wage law, but because your employees will quit and go work for somebody else. Labour cost is no different from any other commodity or service. Could you get a haircut for 1cent? Could you a meal to feed yourself for lunch for 1cent? Of course not. However, do you want the government setting a minimum service or commodity law such as haircut should cost minimum of $50 or the price of food should minimum be $100? If there were a minimum haircut or any other service law, all that will happen would be that the demand for those services will go down and there will be less people providing that service. I'm just using haircut as an example, but the same applies to all kinds of services. Just ask yourself, what would happen if the government set a minimum haircut rate law?

Sun 16 Jan 2011 8:08 AM | Buwakasha

Ah Kow,

"Workfare is NOT ARTIFICIAL"

Of course workfare is artificial. The difference is that the burden of paying the workers more comes from the state rather than the employers. Just like the law to give 2 extra months of maternity leave. The employers don't have to fork out the salary, the government does.

Sun 16 Jan 2011 12:56 PM | quantum - Lousy argument

Buw:
I paid my employee 1 cents a day? You made a wrong assumption that everyone behaves like you do.
If food is expensive like Europe, why? People cook themselves. Case close for your argument.
If haircut is expensive? Why ? Long hair is a good style too. Case close.

Tue 18 Jan 2011 2:26 AM | Buwakasha

quantum,
you got to learn basic economics and what supply and demand is. You just countered your own arguments. You said that if food is expensive, people cook themselves. If haircut is expensive, then don't get haircut. Since you will pay your employees more than the market rate, why shouldn't you pay more for food and more for haircuts? No, you should work extra hard, make more money and pay more for food and haircuts.

So if labour is too expensive, then don't hire people? So you are for unemployment? No sir, the case is not close, all the minimum wage policy will do is to create more unemployment at the expense of those who are already paid low.

Sun 23 Jan 2011 5:30 PM | Cheers

Buwakasha

Your argument is flaw "all minimum wage polciy will do is to create more unemployment at the expense of those who are already paid low".

If you look at our whole 'cabinet' of ministers the way they reward themnselves with 85% incremeant costing 40 billion per year with tax payers money have your heard of retrenchment or unemployment because of the 85% increment and the 8 months bonus depending on GDP growth. what is the recommendation of $6.80 per hour to the low wage earners as oppose to $5.00 per hour at the present moment.

Sun 23 Jan 2011 5:35 PM | Cheers

workfare are meant for people who are 35 years and above how would Singaporean who are below 35 years benefit. Moreover you have to work continuos 3 months to be entitled to workfare and for those on conbtract basis without CPF work 2 months and rest one month be entitled to workfare. 80% of the amount credited to CPF what is the use of 20%. At 35 you can draw you workfare when you reach 65 which is another 30 years.