Minimum clarity;maximum confusion

Yesterday, I did a double take when I saw this headline in ST: Minimum wage “may aid hospitality sector’’. I was trying to figure out how to view this: Implement minimum wage, that is, a wage floor and you might get more people to join the much shunned hospitality sector? Or are we talking about a minimum wage FOR the hospitality sector? Given the G’s allergy to a wage floor, I wondered who was coming up with a contrarian view.

It was Mr Ho Kwon Ping, head of Banyan Tree Holdings.

This is what the story said:

Some form of minimum wage might attract more people to work in the local hospitality industry, Mr Ho Kwon Ping, executive chairman of well-known hospitality group, Banyan Tree Holdings, has suggested.

He threw up the idea as he addressed concerns about low wages in the sector at a hospitality and tourism conference yesterday at Nanyang Polytechnic (NYP), attended by about 250 of its students.

Mr Ho said it might be helpful if industry players could agree on a wage structure for certain areas of the hospitality sector.

Now, this is really difficult to read. So he’s not talking about a minimum wage across the nation, but something more specific for the hospitality sector? So, this is a suggestion he “threw up’’.

Reading the story, it seems that he doesn’t want it mandated, but something for the industry to agree on, like what is happening in the cleaning sector. Now, it’s not the minimum wage in the cleaning sector though but a wage ladder for cleaners to climb if their job scope is increased or their productivity goes up. So perhaps this is the “some form” of minimum wage Mr Ho is talking about. The reference to the cleaning sector, however, is unfortunate because its wage model is mandated by law. Not a voluntary affair.

Then I read what was reported in TODAY which said he was NOT in favour of a minimum wage.

With low wages also deterring many from joining the hospitality industry, Mr Ho, who was responding to a question posed by a student, said he was not in favour of a minimum wage for the entire economy because “it is too blunt an instrument” for wage adjustments.

Mr Ho added that when a country with a high minimum wage faces a severe recession, employers tend to get rid of the newer entrants to the workforce and retain the older, experienced employees. While acknowledging that an industry-agreed pseudo-minimum wage could help the pockets of low-wage employees in the hospitality sector, Mr Ho said what is more pressing is the issue of raising productivity and wages in the industry.’’

Now this puts a different complexion to what he said. And it wasn’t quite “thrown up” but more like he had to say something because he was asked something…

I think the term minimum wage has to be used less loosely. It is a “line’’; employers cannot pay workers less than the level. It doesn’t, however, mean that employers need to raise the wages if employees get better at their jobs, unlike the progressive wage model. I am frankly more in favour of a ladder than such a floor. It would be so easy for employers to simply stick to minimum wage levels than to get them to keep wages in pace with productivity.

And there are already sectors which have voluntarily implemented the so-called progressive wage model. Some chefs have agreed to do so, as well as certain types of hospital workers.

This confusion over terminology is reflected in a letter to ST Forum page today : Minimum wage in hospitality sector not a panacea

BEING a venerated doyen in the hospitality business, Mr Ho Kwon Ping is obviously qualified to expound his views on the sector (“Minimum wage ‘may aid hospitality sector’ “; Tuesday).

Yet the imposition of a minimum wage in whatever guise or whatever sector will not act as a panacea to manpower woes for the employer, or address service deficiencies for the consumer.

Multiple studies have proven that a minimum wage does not decrease poverty, for how can it when, once implemented, salary scales rise for almost all workers, resulting in an inflationary spiral with the lowest-paid still remaining at the bottom rung of the wage ladder?

Hmm. Are we talking at cross-purposes here? What exactly did Mr Ho say – wasn’t it “some form” of minimum wage? – and what did he mean? Again, as I said in my earlier post, I wish the media would give a clearer picture.