Employers' federation scare tactic puts the economy before people

PUBLISHED : Tuesday, 06 July, 2010, 12:00am
UPDATED : Tuesday, 06 July, 2010, 12:00am

The Employers' Federation of Hong Kong accepts that a minimum wage is inevitable. However, in fixing the level, we must all be aware that: The stated intention of the legislation is to ensure a sensible balance between safeguarding the interests of workers and sustaining Hong Kong's economic growth and competitiveness ...

Employers' Federation advertisement, July 5

Let's do the minor quibbles first. Will someone in the federation please tell me how the interests of our people can be set in the balance against our economic growth?

Picture it. Justice holds the scales and in one dish we have the interests of the people of Hong Kong while in the opposite dish we have the interests of the economy of Hong Kong. Is this possible? How can the interests of Hong Kong's economy be different from the interests of Hong Kong's people?

The only way of making sense of this is to translate the words 'sustaining Hong Kong's economic growth and competitiveness' as 'keeping the rich rich'.

If the federation protests that this is not what it means, then let it tell us how the interests of the economy can take on a separate existence from us, one to which we owe a duty of service, somewhere, I suppose, on a plane between man and God. Let us all bow and chant: 'O thou holy economy, ah-ah-ooom.'

And then we have the bit about how the federation 'accepts' that a minimum wage is inevitable. Its members would never have had it imposed on them if they had lifted the wages of security and sanitary workers to decent levels under the voluntary framework they had earlier agreed with the government. They did not accept it in practice at that time but they accept it in theory now. Something rings false here.

Let's just make sure this time that they cannot say they pay the 70-year-old toilet cleaner HK$5,000 a month and then turn a blind eye as the contractor who actually gets the money pays her only HK$2,000.

What the federation really wants to do with this advertisement, of course, is warn us that higher wages will translate into high unemployment. Three academics said so, it's in the fine print at the bottom of the ad, and academics know all about this as they have guaranteed employment and can therefore take a dispassionate view.

I wonder. Everyone in Somalia would be hard at work in gainful employment if things were that simple, and everyone in Switzerland would be jobless.

What counts is the efficiency of employment. Squatting on your rump in the back of a clapped out Toyota pick-up in Mogadishu to show off your machine gun is not efficient employment. Fooling fashionistas that Swiss chocolate is the best in the world and Swiss cuckoo clocks worth 100 times what it costs to make them is very efficient.

And the point about efficient employment is that it changes with success. The general level of wage rises and certain jobs can no longer be sustained. We no longer have policemen directing traffic from booths in the middle of intersections. We can no longer compete in garment making.

It's no real loss. The jobs we lose are drudgery and the new industries that evolve offer more challenging work with their higher pay. It may be a wrenching change sometimes, but would we have children stay children all their lives rather than suffer growing pains?

I do know some ways of halting this process, however.

An effective one would be for employers to connive at freezing salaries for university graduates to less than HK$10,000 a month for a least their first three years. This would drive our own bright sparks abroad very quickly and stop others from coming here. It would certainly do wonders to freeze our economy's move upmarket.

Strange to say, it is exactly the prospect that fresh graduates face in this town right now and many of them do go abroad for just this reason. Would the Employers' Federation of Hong Kong care to comment?

Of course, we could also do it by opening the gates wide to low-end migrant labour. In freezing working incomes this would also freeze our employment profile and no employer would be under compulsion to move upmarket any longer.

Another idea would be to create pointless employment. My favourite has always been digging a tunnel by hand from Lamma Island to Antarctica, lots of jobs there and a wonderful way to make ourselves poor again.

It is simply not true that higher unemployment must inevitably come with a minimum wage. The federation has resorted to a scare tactic here.

It is entirely possible for the jobless rate to go down in an environment of higher working incomes. It will happen if our industries adapt to the challenge of an evolving economy.

I think a high level of minimum wage is a good way of making some of our lazier employers do it.