Wage law 'had no knock-on effect'

PUBLISHED : Saturday, 12 November, 2011, 12:00am
UPDATED : Saturday, 12 November, 2011, 12:00am


A rising tide does not always lift all boats.

Thanks to the introduction of the city's first statutory minimum hourly wage of HK$28 in May, the earnings of the lowest-paid workers have been pushed up, especially those in the catering industry.

But contrary to warnings by employers groups that businesses would be hit hard by a 'ripple effect' - that wages of workers already earning more than the minimum amount would also rise sharply - a survey has found the wages of such workers have not increased at all.

Some workers have also left the catering industry to opt for jobs perceived to be easier, such as security guards or cleaners.

The survey of 519 workers in September by the People's Alliance for Minimum Wage found the median wage increase for workers who earned less than HK$28 an hour before the implementation of the wage floor was 14.5 per cent.

But for workers earning between HK$28 and HK$33 an hour before May, the median was 1.7 per cent. Workers who received an hourly wage of HK$33 or more did not receive a rise at all.

'The findings refuted employers' warnings that that the wage floor would spark a large ripple effect that businesses would be impacted badly,' alliance spokesman Poon Man-hon said.

Employers groups had warned repeatedly before May that the new pay floor would lead all lower-rung workers to expect more money and cause wage inflation for workers already earning more than HK$28 an hour.

'But the truth is that such warnings were bluffs,' Poon said, adding there was no evidence of the doom-and-gloom scenario of businesses being forced to close.

The city's jobless rate is at a 13-year low of 3.2 per cent.

The survey also found that the wages of security guards and cleaners - traditionally among the lowest paid workers - had increased by 7.8 per cent and 23.7 per cent, respectively, to meet the new legal minimum.

Workers in the catering industry benefited the most. Their average pay was raised above the wage floor.

'A dish washer can earn as much as HK$8,500 a month,' Caterings and Hotels Industries Employees' Union president Lee Wan-lung said. 'The implementation of the minimum wage has pushed the wages of catering workers to a record high.'

Before May, a dishwasher earned less than HK$5,000 a month.

Lee said restaurants across the city, which needed 200,000 workers to function, were forced to offer wages above the legal requirement - between HK$30 an hour and HK$40 an hour - as some workers had taken jobs as security guards or cleaners.

'Working in restaurants is much tougher,' Lee said. 'We start early in the morning and leave late at night. There is a break of a few hours in the afternoon in which workers can do nothing but wait to work again.

'Also, we cannot rest at all whenever we work, unlike cleaning workers and security guards.'

Despite offering wages well above the wage floor, the restaurant trade is still short of at least 20,000 workers, most of them dishwashers, waiters and waitresses, according to Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades.

'We are under pressure in employing these workers,' Wong said. 'We can only try to pay more. But it is still OK. The wage increase is not a huge burden. We are more concerned about rising rents and soaring food prices.'