SINGAPORE: A minimum wage for part-time workers was among the suggestions mooted by panelists at a budget seminar organised by the Institute of Certified Public Accountants of Singapore.
But the Singapore Business Federation warns that smaller companies are already struggling with costs and such a move could have negative implications.
More than 90 per cent of all countries have some kind of minimum wage legislation in place.
Some experts said this could help businesses attract more part-time workers, as well as set a wage floor for some low-income Singaporeans.
Regional economist at CIMB Research, Song Seng Wun said: "Having a minimum wage obviously would be much higher than what certain industries are currently paying. If we were to use the gauge of what we pay part-timers on an hourly basis, and that has been around S$5 plus, S$6, perhaps for some, S$7 an hour, and that has been at that level for a long, long time, mainly because of foreign workers.
"So if we were to have a minimum wage, it'll probably have to be a lot higher, if we want to attract at this moment, more locals to participate in the labour force, especially since the pool of foreign workers is now going to be significantly curtailed."
While higher wages are intended to push companies to do more with less, and hence become more productive, the Singapore Business Federation thinks it could put some small companies out of business, and result in job losses.
Chief operating officer of Singapore Business Federation, Victor Tay said: "On the Darwinian aspect, survival of the fittest. The more productive (the) company, the better it is. That (idea) seems to emerge. In theory, that is quite fine but the devil lies in the details.
"When we have 100,000 of them who are micro-enterprises, less than S$1 million in annual revenue, if everyone were to hire 10 people, and 10 multiplied by 100,000 - it's a million (in) workforce. It gets us a bit worried."
And these small companies may not benefit fully from budget initiatives such as the Productivity and Innovation Credit Scheme (PIC) and the Wage Credit Scheme.
Tay said: "Some of the packages like PIC are largely tax incentives, tax-based. Some businesses which are bleeding, struggling, and if they are not actually paying tax, they will not be able to enjoy these incentives."
Experts said the productivity drive has largely been characterised as a process of "creative destruction", that will lead to a net benefit for the entire economy.
This suggests that companies - especially those that are not efficient or competitive enough - will have to close and make way for new businesses.