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Look beyond pay to reduce inequality

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Philip Bowring

The level of the minimum wage is important, but more as a matter of human dignity than as a key means of reducing the shocking level of income inequality. In most circumstances, if employers cannot afford to pay more than HK$30 an hour they should not be hiring - just as households on modest incomes should not be allowed to hire foreign maids and pay them half the legal level.

Equally, it is obvious that the income needs of, say, a married person with two children are different from those of one approaching retirement who is more concerned with keeping busy.

So let us look at means other than a minimum wage to reduce inequality. In no particular order of importance:

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Address the issue of the 150-a-day new one-way permit holders. These are mostly unskilled and contribute to the social problems in remote estates. The Basic Law gives the mainland the power to determine the number entering for permanent settlement, but 'after consulting with' the Hong Kong government. How much consulting has there been over the number and identity of these settlers? Why not insist that the mainland apply some qualification hurdle, as do mainland cities? And maybe include mainland wives, enabling them to stay permanently without increasing the total flow? Failure to do anything on this front is yet another example of the slovenly attitudes of job-for-life senior civil servants.

Drastically raise direct payments for children - not tax allowances which go to those who least need them. The extraordinarily low, socially undesirable birth rate is the result of the very high direct and opportunity costs of having children. It also condemns low-income, single wage-earner families to poverty levels that create social problems which defy solutions.

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Spend much more on child-care facilities so that both parents can work, thereby enhancing the income of low-wage earners. The net cost will be nil as social welfare payments will be correspondingly reduced.

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