Hong Kong

The politics of the minimum wage: Hong Kong, Malaysia… and Singapore?

Warning: Everyone and their grandmother has written about the pros and cons of the minimum wage. That is not the subject of this piece. Irrelevant comments solely about how the minimum wage is the bee’s knees or devil spawn will be deleted.

Why do countries adopt a minimum wage? Surprise, surprise: there are arguments on both sides for the minimum wage. Economists don’t agree. And it’s no wonder. Wage dispersion and unemployment are affected by many factors other than the minimum wage, so the literature on minimum wage will always be inconclusive. In other words, we’ll never be able to say whether the minimum wage, as a general rule, is a good or bad thing. Rather, the best we can do is to find out whether it helped or hurt in a specific instance where a minimum wage was implemented or raised. And before it’s implemented, we can argue all we like but it is next to impossible to model or predict the likely effects. Even in the UK (whose economy is far better studied than Singapore’s), pre-minimum wage fears of job losses have been recognised even by the Conservatives to have been unfounded. So I think if a minimum wage were ever to be implemented in Singapore, the decision would be taken on political grounds, not econometrics. In this piece, I’m not making any judgement on the merits of the minimum wage; instead, I want to focus on the politics of the minimum wage—what makes the introduction of a minimum wage likely or unlikely.

I don’t think it’ll happen in Singapore anytime soon. Here’s why: our labour movement is well-integrated with the government, and the media and political opposition is weak. Having taken care of three possible sources for minimum wage demands, it is difficult to imagine another source for minimum wage demands to emerge and gain political traction. And the progressive wage model which has recently come into effect (albeit only for cleaners) may, instead of leading up to a minimum wage law, defuse demands for the introduction of a minimum wage.

To the best of my knowledge, in the region the minimum wage has been implemented most recently in Hong Kong (legislated 2010, implemented 1 May 2011) and Malaysia (legislated 2012, implemented 1 January 2013). I’ll take each of those cases in turn. (Myanmar also implemented a minimum wage in 2013, but there’s just too little written on it to work on. The UK implemented theirs in 1999, and two good policy analyses for that can be found here and here.)

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Protest movements and generational politics

“I can’t keep calm because Hong Kong is dying.” I’m sympathetic to Hong Kong’s student protestors, who are doing what their leadership has failed to do—press China to respect the self-determination that it promised Hong Kong. And it strikes me that should Hong Kong’s democratic movement succeed, many of its people’s concerns, like public housing and retirement adequacy, will make Hong Kong much more leftist than China is today. But that is not something I can usefully write about.

In keeping with a long tradition of comparing Hong Kong and Singapore, I’m thinking about the difference between the Occupy Central movement and this weekend’s widely-condemned Central Provident Fund (CPF) protest, and how it sheds some light on Singapore’s politics. Of all the ways that the two movements differ, one stands out: Occupy Central is driven by young people, while the CPF protestors are overwhelmingly old people. I think that has implications for politics in Singapore.

From the coverage of Occupy Central in the media like SCMP and BBC, it’s struck me that the vast majority of interviewees are in their 20s and 30s. I’ve read several cases of young people defying warnings from their parents. Even senior high school students are attending the protests. And it must be a typo, but SCMP reported that “13-year-old Matthew Chau” was smarting from the tear gas. Meanwhile, the mainstream pro-democracy leadership seems to be scrambling to keep up with the momentum. Though middle-aged protestors do exist, disapproval seems concentrated among the older generation, with a few isolated reports of anti-protest actions (for instance, the update from 11.40am on Monday on this live feed). The comparison in Singapore is the scrutiny over the NUS Student’s Union finances, but even that’s all been conducted by keyboard warriors, and I can’t tell if the vast majority of students care. You’d have to go back to the 1960s to find comparable student mobilisation in Singapore.

The news out of Singapore is that there was a confrontation between a Return Our CPF rally and a YMCA event held at Hong Lim Park at the same time. Accounts of what happened are confused and partisan, but it seems that the CPF protest set up its equipment at an area different from the one they were allocated, and following either innocent or malicious miscommunication, decided to march towards the YMCA event. This confrontation frightened a group of special-needs children who were about to perform at the YMCA event. Everyone and their grandmother will have something to say about what happened. Clearly, since I wasn’t there, I can’t do that, which is why I’m reflecting on a different aspect of the event. (more…)