Representatives of business and industry in the Legislative Council have warned that the minimum wage law might lead to widespread unemployment among low-skilled workers, a reduction in investment or increased automation to replace workers.
Obviously, they were trying to put pressure on the Provisional Minimum Wage Commission not to propose too high an hourly rate when it makes its recommendations to the chief executive next month. They support a minimum hourly rate of HK$24, as proposed by the Liberal Party.
I support HK$33 an hour, as demanded by labour unions.
Opponents to a minimum wage do not have a leg to stand on; their arguments hold no weight because they are based on empty assumptions. We need a few years before we can see the true economic and social effects of the new law. Therefore, we should not overstate the effects and speculate that a certain wage level will have terrible consequences.
Talk of a reduction in investment and the threat of workers being replaced with technology is ridiculous. Following the economic reforms on the mainland, Hong Kong has seen the migration of many labour-intensive industries. Those who needed to move north to cut costs did so years ago.
In a completely free market, resources are allocated only by the forces of supply and demand. But is that the case in Hong Kong?
A recent article in The Economist warned that a minimum wage would mark a further erosion of the city's free-market ways, but the 'free-of-control' era has long since disappeared.