- Posted by admin
- 01 August 2013
Definition of Minimum Wage
Minimum wage could be regarded as the lowest hourly, daily, weekly, monthly or yearly wage or salary that an employee gets paid. In other words, it is the minimum amount of money that an employer is allowed to pay to the employees. It is implemented by law in numerous countries to protect the rights of workers as well as employers. A difference of opinion exists regarding this topic. While many may disagree with the concept, it is becoming more and more popular each day. Singapore remains to be among the countries which do not have any laws or legislations regarding minimum wages yet. It restricts the employers to take any unjust advantages from their employees under difficult circumstances.
How is it Implemented Across the Globe
The concept was first implemented in New Zealand in 1894. The legislations may vary depending on the state and the amount is decided by taking the economic and social considerations into account. The minimum wage laws are typically designed to protect the rights of labor class workers. They also prevent the employers to exploit their workers with long working hours. Some jurisdictions may even allow the daily tips that their workers receive to be counted in the wage. Inflation, labor supply and demand, wage levels, employment terms and conditions, productivity, growth, labor costs, business operating costs and the standards of living, all play a very vital role in order to determine a specific amount for minimum wage.
It was in 1938 that minimum wage was first implemented in the United States under the Fair Labor Standards Act. From 2007 to 2013, the minimum remuneration has varied from $ 5.15 to $ 9.19 per hour. However, different states have different laws. The laws could be federal, made by the state or by the city. Therefore, some cities have their own standards. In the United Kingdom, the Conservative-Liberal Democrat coalition government has set the rates at £ 6.19 per hour for persons aged 21 and above, while £ 4.98 for the ones between 18 – 20 and £ 3.68 for the ones between 16 -17. However, if the workers are provided other benefits such as accommodation, these limits may vary. It is known as the National Minimum Wage in the UK.
Many other countries such as China, Canada, Brazil, India, Pakistan, Australia, etc. do have laws for minimum wages while some developed ones such as Sweden, Finland, Denmark, Switzerland and others in Europe still do not have such laws but rely on collective bargaining instead. By observing the social and economic conditions, Singapore also needs to devise laws regarding minimum wage.
Benefits of Minimum Wage for Singapore
- Minimum wage provides job security.
- Compared to unemployed persons, it provides incentives to the unskilled workers and also reduces the tax burdens on others in the society by reducing unemployment.
- It helps businesses to maintain a fixed budget.
- Improves class division by ensuring that workers are not exploited.
- It increases productivity of the unskilled labor by paying on a per hour basis.
- One of the major benefits is that it improves local hiring by disallowing any foreigners to agree to work on lower wages.
While it has its disadvantages, Singapore needs to implement laws since the number of foreigners coming to work in Singapore is on a constant rise and poses a threat to the local unskilled labor.