Get your HR Health Check today

Home News HR Whatnow : Minimum Wages

HR Whatnow : Minimum Wages


Enable Group | Sep 19, 2020

Blog, For Employers, For Employees ● 2 min read

The Pros, The Cons & The Trade-offs

3 weeks ago, when the Ministry of Manpower announced its implementation of an enhanced minimum wage for foreign workers across the sectors, there was a mix of reactions on whether this is the solution for the Singapore workforce.

The textbook definition of minimum wages is explained with “the minimum amount of remuneration that an employer is required to pay wage earners for the work performed”. Source

But what give rise to such a concept and what are its benefits and disadvantages?

Here are a few points to understand on this subject

It’s underlaying principle is to protect workers

The purpose of minimum wage is to prevent employees from being exploited by employers. This act serves to ensure that the workers are adequately provided for to afford livelihood. Without such an act it may allow employers to have an unfair advantage during salary negotiations.

 Not all employees are covered

That’s right. Not all types of employments are covered under minimum wages. In fact, under the Singapore’s Employment Act there are several categories which are explicitly singled out which are not covered;

  1. Seaman
  2. Domestic Workers
  3. Managerial/Executive with salaries exceeding $4,500
  4. Employees under statutory board or Government services


Key Advantages of Minimum Wages

  • It is meant to help boosts productivity
  • It reduces income inequality
  • Spur economic growth
  • Improves employee retention

The argument of placing minimum wage is largely hinged on the effects of the employees having a better condition to their lives which in turn should allow them to provide better services to their employers and have a further output of the company’s product & services.

The reverse can also be true that if the conditions are not favourable for the employees they may leave the company easily or perform below their capabilities.

Key Disadvantages of Minimum Wages

  • Increased labour cost
  • Reduce local employment
  • Increase cost of living
  • Increased stress on businesses

In most countries, implementation of a minimum wage is an unfunded mandate which the employers will have to shouldered themselves and it starts the motion of higher outsourcing elsewhere that has cheaper labour. In turn it could lead to lower local employment and higher local poverty.



Established in 2013, enable Consulting is a specialised HR solutions provider for small and medium-sized enterprises.

We believe that having a strong and robust HR function is a key driver for continuous growth in any successful business. It is on this belief that we have built many successful partnerships with clients across different industries.

We are a people business and it is our talent pool that defines us. Each and every one of our consultants is highly professional with many years of experience in HR management and services.

Our Consultants are PMC certified to further be able to help local SMEs improve and optimise their HR operational efficiency through Singapore Grants. enable is about offering affordable, high value adding solutions to improve business performance; while at the same time nurturing and inspiring a fair and respectful working environment. But above all, enable is about enabling you.

Contact us for a non-obligatory Q&A consultation today

Related News


Enable Group | Oct 25, 2023

How Outsourcing Can Benefit Businesses in a Global Recession

Following the ruckus brought about by the COVID-19 pandemic, economies are currently troubled by a number of issues, such as skyrocketing prices, weakening demand, and increasing unemployment rates. These problems pose a great threat to corporate profitability, especially to small businesses struggling to overcome the financial effects of a global health crisis. With economies continuously […]

Blog, For Employers, For Employees • 3 min read


Enable Group | Feb 11, 2019

5 Daily Habits of Highly Successful People

According to Benjamin Franklin, “Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.” What habits have brought you to where you are today? Here are some habits you can adopt to create the life you truly want to live. 5 Daily […]

Blog, For Employers, For Employees • < 1 min read


Enable Group | Jan 31, 2019

Happy Chinese New Year!

As we usher in the Year of the Earth Pig 2019, we would like to wish everyone, “HAPPY CHINESE NEW YEAR”. Our heartfelt thanks to all our clients and business partners for their support and trust in enable’s services and products. 2018 has been a year of growth for us at enable. We feel privilege […]

Blog, For Employers, For Employees • < 1 min read