Radical change in job market

PUBLISHED : Wednesday, 02 May, 2012, 12:00am
UPDATED : Wednesday, 02 May, 2012, 12:00am


As a review of the year-old minimum wage moves nearer, bosses say the law is shaking up the labour market in unexpected ways.

Workers toiling in physically demanding jobs are looking for easier posts, older staff are being edged out by younger colleagues with more qualifications and some new workers are earning about the same as their supervisors, according to employers' representatives.

Dishwashers, couriers and taxi drivers are becoming building security guards, managers say, leaving the physical toil to older workers who lack qualifications and have few alternatives. Applications for a government security personnel permit - a must for any security guard - stood at 3,699 last April, just before the minimum wage came in, but rose to more than 5,000 by August.

In contrast, vacancies in the accommodation, food services and retail sectors rose dramatically.

Bosses say the large increase in the wage floor demanded by unions and concern groups could have an even more dramatic effect on the labour market, with implications for everyone in Hong Kong.

Critics had warned that the wage would affect the unemployment rate. But the jobless figures have, in fact, gone down slightly, from 3.5 per cent in April last year to 3.4 per cent.

However, businesses say the wage floor has been a key factor in the inflation rate, which was above 5 per cent for most of last year - having been below that level for the previous three years.

Andrew Lee Chun-lai, vice-chairman of the Association of Property Management Companies, said the law had disrupted the structure of the job market. Employers had cut numbers, he said, and expected staff to do a wider range of work.

'Now, the cleaners may have to also do the gardeners' jobs. A security guard's salary may also be similar to his supervisor's. Therefore, there are no longer posts such as assistant supervisors [as people in such posts move on],' he said, adding that security guards working a 12-hour day could earn more than HK$10,000 [based on a seven-day week] - more than some university graduates.

He said some of the sector's new recruits had come from the catering sector, one of the firmest opponents of the minimum wage.

Simon Wong Ka-wo, president of the Federation of Restaurants and Related Trades, said the minimum wage had boosted pay for some jobs well above the HK$28 level. There were reports of dishwashers in restaurants being offered up to HK$50 an hour. Vacancies in the catering sector were up 15 per cent year-on-year to 8,922 in December, while in the retail sector the number of unfilled posts stood at 6,277, up 27 per cent on the same month in 2010.

One group that may have lost out under the wage floor is older workers. In the three months to the end of February, the unemployment rate among workers aged over 60 was 2.7 per cent, up from 1.9 per cent in the three months before the wage floor was implemented. For older women, the rate rose from 1.2 per cent to 2.8 per cent in the same period.

Wilson Shea Kai-chuen, president of the Hong Kong Small and Medium Enterprises Association, said it was not unusual to see new, younger employees paid more than their older, more experienced colleagues.

With younger workers beating them to jobs traditionally taken by older people, some have turned to a trade not covered by the law - working for themselves as taxi drivers.

Low Shih-cheng, from the Motor Transport Workers General Union's taxi branch, said young drivers with qualifications realised they could rise through the ranks to earn more than HK$10,000 per month in another job.

Another problem, Lee says, is the uncertainty over a review of the wage floor, launched by the Minimum Wage Commission earlier this year. The original wage floor was set in October 2010, and the commission is expected to recommend a new level later this year.

Estate management companies bidding for government contracts are struggling to work out staff costs.

'If you [assume the hourly minimum wage will be] HK$33, but it turns out to be HK$30, you are losing HK$3 an hour [per employee],' he said. 'This is a tricky phenomenon and not very ideal,' he said.

One complaint about the minimum wage law is that it leaves the issue of paid rest days and meal breaks to employers' discretion. Many employees lost such perks when their hourly pay rose to meet the minimum wage. Lee urged the government to set a standard formula for employers to follow.

Wong Shek-hung, advocacy officer for Oxfam Hong Kong, said hundreds of thousands of workers still struggled to meet basic needs. '[They make] even less than those living on dole handouts.'


The minimum wage per hour that unions and concern groups want to see in Hong Kong. The current minimum wage is HK$28 an hour