Unconscionable to set minimum wage too low

PUBLISHED : Wednesday, 29 September, 2010, 12:00am
UPDATED : Wednesday, 29 September, 2010, 12:00am

Following passage of the minimum wage law, debate is now focused on reaching an agreement on the initial level. The labour side favours an hourly rate of HK$33 while most employers have agreed on HK$28 - a slight improvement from the abysmal HK$20 put forward earlier by Tommy Cheung Yu-yan, who represents the catering industry in the Legislative Council.

Even Cheung now seems to agree we need to increase the level, although he insists that it should not exceed HK$24 per hour, as proposed by the Liberal Party, which represents business interests.

If we look closely at these proposed figures, it is easy to see who is being reasonable and who is not.

To be honest, the level proposed by the likes of Cheung is rather mean and nasty. The catering industry is notorious for paying some of the lowest wages. Employees have to toil long hours doing repetitive work, often in an unpleasant environment. Even though they are supposed to work eight hours a day, many are forced to put in overtime with very little extra pay. It's not uncommon for people in the industry to work 12 hours a day because of the split-shift system under which they are on standby for a few hours in the afternoon without pay.

If the minimum wage were set at HK$$20 an hour, it would add up to a monthly salary of around HK$4,160. For those in the catering sector, it would mean having to work at least eight hours a day, six days a week, without time off on public holidays. If that's not mean and nasty, what is?

Even if the rate was raised to HK$24 an hour, a monthly salary would remain below HK$5,000. The government is believed to be considering an hourly rate of HK$28, but that wouldn't make much difference; the monthly salary would still be below HK$6,000.

Some labour representatives have expressed support for an hourly rate of HK$30, which would raise the monthly wage to HK$6,240; HK$33 per hour would equate to HK$6,864.

Most bosses seem to have abandoned the original HK$20 an hour, but the alternative of HK$24 suggested by the Liberal Party is still a disgrace and unacceptable.

Cheung earns HK$70,000 per month as a legislator. The council holds around 60 meetings annually and each session lasts about 10 hours. Cheung, a race horse owner, skips some Wednesday sessions to attend race meetings. Even if he attended all Legco sessions, that would add up to 50 hours of meetings every month. Based on his Legco salary, his hourly rate amounts to HK$1,400 - 58 times the proposed HK$24 an hour for workers.

Incidentally, Cheung spends about HK$40,000 on his race horse each month, hoping it can win lots of money. Having to attend all the training sessions and race meetings, his horse, Gold Rush, clocks up a total of 465 'working' hours per year, or 39 hours a month.

That works out to be an hourly rate of HK$1,026 - about 43 times the rate of HK$24 that he and his political party proposed for low-skilled workers. Perhaps some see these unskilled labourers as worthless and dispensable because they earn less than four-legged animals.

Cheung has argued that wages account for 20 per cent of overheads in the catering sector. But let's not forget that most restaurants impose a 10 per cent service charge, which means wages are partially paid by the public. So, if we go for HK$30, or even HK$33, it still wouldn't cost bosses that much more.

It's clear that the proposed HK$24 hourly rate is not only one of the worst forms of exploitation of the underprivileged, it is also a despicable and distasteful way of abusing the system.

Albert Cheng King-hon is a political commentator. taipan@albertcheng.hk