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Thursday, September 1, 2011

A person's perspective of minimum wage

I asked my blog reader, Hang Lian, about how the minimum wage impacts business and people in New Zealand. Here is his reply.

Hi Mr. Tan,
I did not look into the minimum wage in details. What I know is it's $13 an hour (about $500 a week on 40 hrs). The exchange rates between Spore and NZ is about 1:1. 

As far as I can see, although minimum wages have been applied, the cost of living is not as high as one would expect. Many employers here are SMEs, so I also don't see how a minimum wage could add a lot of burden to businesses, let alone the MNCs.

I think the most important advantage I see is that as long as a person is willing to work, even if he earns the minimum wage, he will be able to live a reasonably comfortable live (without the need to spend too much time working as well). I lived alone for a while when I first came here, and I can say that the minimum wage is quite sufficient to support a person's basic expenses of accommodation, food, transport, etc (in some cases even 2 people). 

In Spore, for those very low income earners who earn less than $1000 a month and in some cases, working more than 10 hours a day, I can't see how this group of people make ends meet. I suspect their quality of live would be greatly compromised.

There are some employers who try to work around the minimum wage policies by paying less, which is against the law.

Of cos a lot of things are also a result of a combination of various other factors, like the general environment, working culture, lifestyle, taxes, labour laws, etc.

Hope that helps.
Hang Lian

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