Hong Kong finance chief John Tsang must face the reality: times are tough for small and medium-sized firms
The drinking habits of Hongkongers and the wages of dishwashers do not, at first glance, appear to have anything in common. So when Financial Secretary John Tsang Chun-wah linked the two in his blog on Sunday as pointers to the state of the economy and standard of living, many eyebrows were raised. Tsang was accused of having lost touch with the people when he linked coffee and films with the middle class a few years ago. Being a whisky lover himself, this time he noted that there was a growing taste for liquor. While he said this was indicative of the city's improving standard of living, he added that small- and medium-sized enterprises were finding it increasingly difficult to recruit staff. A dishwashing job in a prime location was offering as much as HK$12,000 a month but that didn't mean people were willing to do it, he quoted a restaurant owner as saying.
This story about the dishwashing job is unsurprising. Last year, a food outlet in Tai Koo Shing reportedly offered a dishwasher HK$18,000 a month but still could not retain the worker. Whether the wage is attractive enough is open to debate, but it is true that workers have more choices during boom times. Thanks to the introduction of a minimum wage in 2011, those doing low-end jobs have become better off. According to government figures for June to August this year, there was a year-on-year increase of 8 per cent in wages for those at the bottom.
Rising labour costs is not the only problem, though. A bigger challenge comes from soaring rents, which are putting smaller players out of business. The ripple effects triggered by a slowdown in tourism and retail can be felt across different industries already, with shops and restaurants shutting down in prime areas.
While there are signs that rents have started to drop, they are still very high. Tsang did not say what measures he would take to help the sectors most affected. Businesses may have to brace for more difficult times ahead.