Singapore needs minimum wage? Think twice, you may not benefit from it.

I often get asked: “Do you have minimum wages in Japan?

And when I reply “Yes”, the remark that follows is: “That’s great! That is what Singapore really needs!”

I hear this quite often but hey, do you really know what you are wishing for? In a lot of countries, having minimum wages do not make your life easier. In fact, you might suffer more when it happens.

Let me talk about my hometown, Hokkaido. (Different prefecture has different minimum wages in Japan) Our minimum wage per hour is 734 JPY/hour, which is about 9 SGD/hour. And in some dangerous industries like construction and manufacturing, it’s even 50-100 JPY higher. Sounds not bad, right?

If your employer pays you less than this, they get serious punishment.

This is the kind of money you earn if you work in restaurants, retail outlets, call centers and administration offices. Workers’ law says you cannot make your employees work more than 40 hours per week, therefore you will make around 29,360 JPY/week if you work full time. It’s about 127,716 JPY (=1583 SGD)/month.

Here comes the interesting part: Minimum wage pays a lot less than “Social Security Income” (Japan’s welfare payout) you can get from the government (when you cannot find a job or not in the condition to work).

According to our law, monthly Social Security Income is calculated according to “the minimum standard to sustain your life”. Now, Social Security isn’t a breeze. You cannot use air-conditioning during the summer (I have learnt of a beneficiary who died because of this rule) and sometimes government refuses to pay you because you had 4kg of extra rice in the kitchen.

Do you get the idea of how “minimum” the minimum standard is for Social Security Income? Yeah, it’s really minimum.

So how much can someone receive from Social security income in Sapporo (capital city of Hokkaido)? These are some examples:

Single (age of 68):

80,820 JPY (=1,002SGD)/ month + subsidies on your rental

Couple (age of 68, 65):

121,940 JPY (=1,511SGD)/month + subsidies on your rental

Family of 3(age of 33, 29, 4) :

175,170 JPY (=2,171SGD) /month + subsidies on your rental

Single mother(age of 30) with 2 kids (4, 2):

193,900 JPY (=2,403SGD) /month + subsidies on your rental

Do you see? Our minimum wage is lesser than this Social Security Income! And Social Security is supposed to keep you alive and not to starve yourself.

Does it sound silly if I ask if you’d rather work and get less money or just be unemployed and apply for Social security income?

Until last year, this conflict was seen in 11 prefectures in Japan. After the efforts of unions and activists, they raised the minimum wages for 15 JPY/hour average, so only Hokkaido has this loop-hole now. But still, this figure does not prevent you from starving.

Why doesn’t minimum wages help people live a better life? The answer is very simple.

When you pay everyone “enough”, this sudden pay raise will drive the cost of end-products through the roof, and guess who else but YOU, the consumer, would have to bear this cost.

Prices rise, the low waged worker again can’t afford it: it is a vicious cycle. The benefits of minimum wage is then neutralized.

Look at Singapore. You know how little money foreign construction workers and domestic helpers earn, right? What do you think would happen if they start earning minimum wages alongside Singaporeans who are working behind desk and air-con?

Do you think you can still afford the buildings they build? Do you think you can still afford to hire a domestic helper?

And….. there’s one more thing you should know. When you have minimum wages in Singapore, your employer will be very happy to have the excuse to keep your wage to the minimum.

No matter how much you complain, your employer will smile at you and say something like this:

“I am paying you more than minimum wages. So what’s your problem?”

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