TL;DR – The prices of necessities are expected to increase due to a few factors, including the implementation of minimum wage.
Inflation is rising in Singapore. According to official data, Singapore’s core inflation rose to a 10-year high of 2.9% year-on-year in March, up from 2.2% in February. But we’re not the only nation feeling the pain and pressure from the rise in the cost of basic necessities, among other things.
Up in the north, prices of all basic necessities are expected to increase by up to 60% next month, reported World of Buzz. Reportedly, Malaysians have already been feeling the hike since Ramadan, when prices of necessities such as meat, chicken, and vegetables soared.
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University Tun Abdul Razak economist Professor Emeritus Dr. Barjoyai Bardai said that the rising prices of raw food items would have a ripple effect on the food and beverage (F&B) industry.
Speaking to the Malay Daily, the economist noted that the price hike depends on demand and supply.
He also attributed the increase in the price of goods to the implementation of the minimum wage, which saw Malaysia increasing its national monthly minimum wage, from RM 1,200 (SGD $379) to RM 1,500 (SGD $475) starting 1 May 2022.
He explained that with the increase in the minimum wage, the purchasing power will also increase. As such, traders would take the opportunity to increase prices as well.
“Besides, the Russia-Ukraine conflict would affect the import sector and lower supply despite the rising demand and higher purchasing power. This would result in businesses raising prices of several items and consumers would have no other choice but to buy the items at higher prices,” he told the Malay Daily.
Singapore’s approach to fighting inflation and the rising cost of living
Here in Singapore, if you don’t already know, the Government has assured Singaporeans that it will do more to help Singaporeans if inflation turns out to be higher than expected.
Unlike Malaysia and some other countries, Singapore does not prescribe minimum wages for its workers, whether local or foreign.
However, Singapore has implemented the Progressive Wage Model (PWM) for some sectors like the cleaning, security, landscape, and lift and escalator maintenance sectors. First mooted by NTUC in 2012, the PWM sets out the skills workers must attain to qualify for higher wages in certain low-paying sectors.
Reportedly, the Government will also extend the Progressive Wage Model (PWM) to more sectors, starting such as the retail, food services, and waste management sector to ensure that wages can be raised at a sustainable and meaningful pace, without hurting the livelihoods of this group of workers, who are usually the lower-wage workers.
Complementing the PWM, are other support schemes such as the Workfare Income Supplement (WIS) which tops up the salaries of the lower-wage workers and helps them save for retirement, and the social transfers.
These social transfers provide financial assistance to needy individuals and families through schemes such as the permanent GST Voucher scheme, U-Save Rebate, the Service and Conservancy Charges (S&CC) Rebate, and the MediSave top-ups, and are aimed at helping to offset the taxes these needy individuals and families may have to pay.
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More recently, it was announced that the disbursement of Community Development Council (CDC) vouchers will be brought forward to mid-May 2022.
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These vouchers, which can be used at more than 16,000 participating heartland merchants and hawkers, are part of the Government’s measures in helping to alleviate some of the rising costs Singaporeans are facing.