Not A Minimum Wage, But A Negative Step Nonetheless

BMI View: While far from constituting a national minimum wage, the Singapore government's latest initiative to set a wage floor in the cleaning industry is nevertheless a significant development. In line with our expectations for the ruling People's Action Party (PAP) to introduce increasingly populist policies in order to shore up support among the electorate, we believe that such measures reflect the ongoing maturation of Singapore's democratic process, which will have notable implications for the city-state's business environment.

In a surprise move, the Singapore government has introduced an amendment to its labour laws mandating a wage floor of SGD1,000 for cleaners and security guards. The proposal will be tabled in the upcoming session of parliament, with an implementation target of September 2014. Under the new guidelines, cleaning and security firms will be required to register with the government in order to receive a license, which will be compulsory in order to continue operations. Among the qualification criteria will be the adoption of the new progressive wage scheme, which will necessitate a minimum monthly wage of SGD1,000 for full-time employees at a basic skill level. As its name implies, the progressive wage scheme will also introduce graduated levels of pay for those employees who upgrade their skills in a continued push towards increasing productivity levels across the economy.

Milestone In PAP Policy

Feeling Left Out
Singapore - Average Household Income By Decile

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This article is tagged to:
Sector: Country Risk
Geography: Singapore

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