Retail in Asia

In People

Wage shock therapy will hit small biz hard, says Singapore SMEC

The SME Committee (SMEC), an advocacy group led by the Singapore Business Federation (SBF), has weighed in on the debate over the merits of Prof Lim Chong Yah’s shock therapy proposals for radical wage hikes, saying that the sudden and sizeable increase in wages will hit businesses, in particular small and medium-sized enterprises (SMEs), hard.

Earlier this month, Prof Lim, former chief of the National Wages Council, raised a controversial three-year wage restructuring proposal aimed at tackling rising income inequality and low productivity. The restructuring exercise would see a 50 percent pay hike over three years for those earning less than SGD1,500 (USD1,208), while those drawing SGD15,000 or more would see their wages frozen for three years. He believed that a radical wage increase would force productivity increases.