Back to square one on minimum wage

PUBLISHED : Tuesday, 01 May, 2012, 12:00am
UPDATED : Tuesday, 01 May, 2012, 12:00am


A year has passed since the introduction of Hong Kong's first legally binding minimum hourly rate of pay and there can be no quibbling that its effects have been positive. Surveys show the wages of about 70 per cent of low-income workers and their families have risen, leading to five to 10 per cent across-the-board increases for the general workforce. But legislation in itself is not the be-all and end-all of such a process - it has to be vigorously enforced and wage levels have to be regularly reviewed and updated. Nor should we forget that this is only the first stage of improving employment terms and conditions for all in our city.

Years of bitter negotiations between employers and workers led to the agreed rate of HK$28 an hour. The large-scale job losses and company closures predicted by bosses, especially those running small and medium-sized firms, never happened. To the contrary, there has been an increased demand for staff. Better wages and a healthy job market are not cause for complacency, though. Hong Kong will not progress, nor will the lives of its people improve, without earnings keeping pace with costs.

Despite the lessons learned, it feels as though we are back to square one as negotiations for a review gather steam. Unions and employee groups are seeking a rise in the hourly rate to between HK$33 and HK$35, while employees are again making dire warnings of company failures and lay-offs should such levels be adopted. There is certainly a limit to how much smaller firms can absorb wage increases, so striking a balance is important. It must not be done at the expense of the most vulnerable in the workforce, though - the elderly, disabled and women.

Thousands of workers continue to be underpaid. The worth of the law will be diminished unless greater effort is put into catching and punishing employers caught flouting the rules. Fair and reasonable wages have to be paid. While levels are being reviewed, we should consider moving on to the next target - maximum weekly working hours.