PSP's Leong Mun Wai proposes minimum 'living wage' of S$2,055 per month for local workers

He suggested that the increase be paid by the government from 2021 to 2023 to allow businesses time to adjust.

Tanya Ong | February 25, 2021, 02:27 PM

Non-Constituency Member of Parliament Leong Mun Wai from the Progress Singapore Party proposed several recommendations for the government's consideration during the Budget debate in Parliament today (Feb. 25).

His suggestions were aimed at addressing what he perceives as insufficient compensation of the working class, reducing reliance on foreign workers, and strengthening social security for Singaporeans and PRs.

Living wage for locals

Among his suggestions included a "living wage" of S$1,500 take-home pay (or S$2,055 in gross wages) for all local workers.

Such a recommendation would, in his view, allow low-income Singaporeans to have a peace of mind rather than having to wait for "ad-hoc" assistance schemes provided by the government.

We should not wait for a "decade or two" for the government to increase the wages of low-wage workers through the Progressive Wage Model, sector-by-sector, he said.

This minimum living wage suggestion was previously published in PSP's manifesto for GE2020, but an exact amount was not stated.

So, how did they arrive at this figure?

Leong cited a 2019 minimum income standards study done by Assistant Professor Ng Kok Hoe and his team from the Lee Kuan Yew School of Public Policy.

It postulated that single elderly households (above 65) needed S$1,379 per month, while single households aged between 55 to 64 needed S$1,721 monthly.

This study gave a good benchmark to design the living wage policy, Leong said. He estimated that this would cost S$1.6 billion per year in each of the next three years.

He also suggested that the government pay the main portion for the increase from 2021 to 2023 to allow businesses time to adjust.

Other suggestions

On foreign talent

Leong also suggested imposing a S$1,200 monthly levy on all EP holders in order to reduce Singapore industry's dependence on foreign workers, which he said would generate operating revenue of S$2.7 billion per year.

He claimed that this levy will differentiate "true foreign talents", who are high-salaried and less affected by the S$1,200 levy, from those who are simply "cheap labour that compete unfairly".

PSP previously suggested in their GE2020 manifesto to introduce an EP quota and to lower the S Pass and Work Pemit quotas.

Currently, the manpower ministry imposes foreign worker levies and quotas on employers for Work Permits and S Passes, but not for EPs. From Sep. last year, the minimum qualifying salary for EPs was raised to S$4,500.

MediShield and CareShield

Leong also claimed that half of CPF members do not have enough money in their CPF account to satisfy the basic retirement sum at 65, although he did not cite an exact source.

This is because apart from retirement use, there are two additional uses for the CPF monies: purchasing HDB flats and topping up the Medisave Account.

He explained that having to pay for the MediShield and CareShield premiums are a "big drag" on retirement resources.

Hence, he recommended that the government funds the insurance premiums of the MediShield Life and CareShield schemes for all Singaporeans and PRs.

This will increase operating expenditure by S$2.6 billion per annum, which is 0.5 per cent of Singapore's GDP, according to Leong.

Top photo via MCI Parliament stream/YouTube.