Minimum wage should come from taxpayers, not businesses

Here’s my 2-cents worth on the Minimum-wage issue that many people seem to be advocating as a means to help the lower income. My disclaimer: I’m way out of my depth here, I’m ignorant about how the country is run financially or how economics works (my JC refused to let me do Econs with Bio, and forced me to do Physics instead. No disrespect to you physicists out there, but till today, I don’t see how learning the equations of gravity has helped me at all — no matter what, we all stick to the ground). So this is my 2-cents worth that i’ll ask everyone to take with a pinch of salt. And I’ll LOVE to hear your views, especially if you disagree.

You know how, during PE lessons, when you have to play a 2-sided ball game, and you need to form your teams ?  There’ll be some really really lousy people (I was one) , and if the teacher forced everybody to play, the team quality will be compromised with the lousy people. To have good teams, and a good game, it is more beneficial for the lousy people to stay out of the game. These lousy people “contribute” by staying out of the way. Now, lets say that the teacher rewards the teams — the winning team gets a chocolate bar each. If you were a lousy person, staying out of the game means you WILL NEVER get a chocolate bar. If you insist on being in the game, you MAY get a chocolate bar because your team mates might be able to compensate for you and still win the game. But if you insist on being in the game, the ENTIRE team will actually lower its chances of getting chocolate bars and will thus suffer with you in the game. But its not fair to force you out and deny you of your chance totally. The most beneficial thing for the team to then do is, ask you to stay out of the game, and for agreeing to do so, they will each give you a small portion of their chocolate bar each, such that at the end, you get almost the same amount that everyone else gets. This way, the team has a better chance of getting the chocolate, and you have contributed to that  increased chance by staying out, and you are compensated for that act. The teacher should not be the one to give you, the lousy person, extra chocolate, because then the teacher will be rewarding both the top players, and the non-players, and everyone would naturally want to be a non-player then.

Taking this principle, and applying it to the Minimum Wage issue.

I do agree that anyone living in singapore has to have a certain minimum income in order to live in a decent manner. But I do see the govt view about having to remain competitive. Because if I were a businessman, I wouldn’t like laws that prevent me from doing my businesses at the lowest possible cost. How would I benefit, as a businessman, from hiring a more expensive person over a cheaper person, for the same work done? And how would I benefit to pay someone more than he is worth, because of a minimum wage law?  Businesses may move out to regional countries if we force them to pay a minimum wage, which i suspect might be quite high to make sure the worker can live decently in Singapore.

Businesses moving out of the country is bad for the country. When the businesses move out , these low income earners would be reduced from fighting for a minimum wage to fighting for a job. That leads to problems for the country as a whole due to the social cost.

So at the end of the day, it is the entire country’s population that benefits from making sure business can be unethical, and can pay workers competitively, so that they remain here. But who pays the price for that benefit? Currently, it’s these low income earners that pay the price. Do they benefit? Yes, to a certain extent, because at least they have jobs. But it’s the ENTIRE population that really stands to benefit the most, and the entire population is NOT paying for it at the moment. We’re trying to shift the cost of this benefit from the low income earners to the businesses, when we are the ones benefiting. We are the ones who ought to pay the costs.

And so I think that these low income earners should have their income TOPPED UP to that minimum level to live decently. Topped up with TAXPAYER money, rather than with the businesses money. And we should pay more taxes for that. Because we benefit from their “cheap labour”. Even for the chronically unemployed, one could argue tha we benefit from their “unemployment” because these people tend to be really lousy workers and forcing businesses to hire them will not be productive. So we should support them with our taxes.

And of course we need the government to enforce that tax increase. Charities are unfair, because with the charity model, the kind-hearted people are paying the cost, and why should we reward selfishness and make the kind-hearted pay?  Taxation make sures that everyone contributes fairly.

So what do you all think?