【明報專訊】THE MINIMUM WAGE COMMISSION has come to an agreement over the hourly minimum wage rate, which is to increase from the current $28 to $30. It will submit its report to Chief Executive Leung Chun-ying, and it is expected that the recommended increase will be accepted. This means that about 330,000 lower-paid workers will get pay rises this year.
A minimum wage was introduced in Hong Kong in May last year. At first, there were fears that this would force many firms out of business and push up the unemployment rate. But such fears have proved unfounded, and Hong Kong's economy as a whole has not suffered. The unemployment rate published by the government a few days ago stood at 3.2 percent - or close to full employment.
The Minimum Wage Commission's review of the statutory minimum wage has sparked much controversy. There are employers who argue that, with the current uncertain economic outlook, the minimum wage should not be increased, since there can be no going back once an increase is made. Employees, on the other hand, point out that the minimum wage must be adjusted to factor in the inflation rate over the past three years, stressing that the current hourly rate of $28 was fixed according to the mid-2009 data and is now totally unrealistic. Some (including political groups) have gone so far as to demand that the hourly rate be increased to $35. However, if one considers the issue according to the objective figures published by the Census and Statistics Department, one will agree that an hourly rate of $30 is acceptable to the public and beneficial to the lower-paid.
Take for example the "estate management, security and cleaning services" industry. The industry's expenses in wages will increase by $640 million (about 2.9 percent) if the hourly rate is increased to $30, but will increase by $2.68 billion (about 12 percent) if the rate is increased to $35. As for the "restaurants" industry, the expenses in wages will increase by $190 million (about 0.6 percent) if the hourly rate is increased to $30, but will increase by $1.37 billion (about 6.3 percent) if the rate is increased to $35. These figures show clearly that an hourly rate of $35 will constitute a crushing burden for the two industries, and many firms will be forced either to go out of business or steeply raise their fees and charges, which will boost inflation and increase the ordinary citizens' financial burden noticeably. Seen in the light of the above data, the demand for an hourly rate of $35 is simply unrealistic.
Increasing the hourly rate from $28 to $30, on the other hand, is both practicable and appropriate. First, the increase is not insignificant since about 330,000 lower-paid workers will benefit. Second, it means an increase of 7.1 percent, which is not very low, but neither is it very high compared with the inflation rate recorded over the last two years.
In this first review of the minimum wage, the Minimum Wage Commission members have come to a compromise only after a month's discussion, in which the employers' and employees' representatives sharply disagreed with one another. Taking into consideration the two sides' different situations and expectations, we would like to make the following proposals:
(1) A review should be conducted once a year instead of once every two years, so that employers and employees can more accurately assess the economic factors of the time, including the inflation rate, and decide on the hourly minimum wage rate more realistically.
(2) The review mechanism should be so revised as to make the Minimum Wage Commission's deliberation more objective and firmly based on reliable data. Let rationality and practicability govern the operation of the commission.
Presented by lecturers of Hong Kong Community College, PolyU and The Hong Kong Polytechnic University
Ms. Wience Lai
Lecturer, Hong Kong Community College
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