Wednesday, September 22, 2010

Minimum wage, maximum impact

Sep 22, 2010

MINIMUM wage means different things to different people. Unions, management and low-wage workers will view it differently.

I define it as wages designed to protect workers from economic forces should they depress salaries to mere subsistence level. It is a good thing.

Wages determined by "market forces", which later need supplementing from Workfare, send the message that my job is undeserving of a pay required for basic survival. Will this message erode work ethics? Very likely.

[Why? If you choose to view your job as basically worthless (or worth less than what you need to survive/subsist) then sure, you won't have much work ethics left. But many people with work ethics in this situation would say, "I need a second job to supplement my income". The Workfare Income Supplement may then serve to relief them of the need to get a second job.]

History has shown that depressing or eliminating wages in the name of productivity is counter-productive eventually.


Heron of Alexandria, a Greek engineer, invented the Aeolipile, the first steam engine, in the first century AD. It took 1,700 years before Scotsman James Watt put the steam engine to use and launched the Industrial Revolution.

Absence of low wages spurs employers to seek new technology. The silver bullet of innovation is for the bold. Heron did not harness his steam engine for industry simply because there wasn't a need to, as slave labour was cheap. Had Heron done what James Watt did, the Industrial Revolution would have been brought forward by a thousand years.

[That is quite a leap in logic. While we recognised it as a steam engine, Heron and his contemporaries saw it as a scientific wonder to study the laws of heaven and the winds. In any case, the industrial revolution was a mixed blessing for the people of the times. Certainly their lot in life was not all for the better or Karl Marx would hardly be moved to write his communist manifesto expounding on the exploitation of labour by capital and the class war.]

What an impact it might have had on humanity.

Dr Chan Chee Leong

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