Employers' Federation resists rise in HK$28 minimum wage

Federation says HK$28 an hour is high enough, and is also concerned about the impact of standard working hours and paternity leave

PUBLISHED : Tuesday, 11 September, 2012, 12:00am
UPDATED : Tuesday, 11 September, 2012, 3:26am

A federation representing about 500 employers is calling for the minimum wage to stay at HK$28 an hour, saying that otherwise companies will have to cut staff to stay in business.

The Employers' Federation issued the call at a time when the Minimum Wage Commission is preparing to submit a review of the scheme to Chief Executive Leung Chun-ying, by the end of next month.

Its view was challenged by minimum-wage advocates who said the level should be raised to HK$35 an hour.

The federation is also concerned about the government's plan to introduce standard working hours and paternity leave, saying that these labour laws will make the city a less attractive place to do business.

Chairman Pang Yiu-kai said the current minimum wage was high enough, as it was nearly on a par with the median wage.

Government figures, however, put median hourly pay for May-June last year at HK$52.40.

Pang said it was not a suitable time to increase the minimum wage level now because of the unpredictable nature of the economy at present.

He also said that since the minimum wage was introduced in May last year, many restaurants and fast food shops had cut staff to remain in business.

"The restaurants know that they cannot raise prices any more and so they have to cut staff," he said. "The quality of services drop and there is less meat in your meal. If service gets worse, tourists will ask why they should come to Hong Kong."

The federation met the Minimum Wage Commission recently. It said that while the commission had been "very attentive" to the federation's view, it had not said if or by how much the minimum wage was likely to rise.

Reports have suggested that the level will be between HK$28.50 and HK$29.50 an hour.

Duncan Abate, a member of the federation's executive committee, recalled that representatives from three or four old people's homes had pleaded with the commission not to increase the minimum wage because they could not find carers for residents. The representatives said recruitment had become difficult because people preferred other, less physically demanding, jobs for which they were paid the same HK$28 an hour.

Pang was also concerned about the impact of standard working hours and paternity leave because they would distort the city's supposedly free market.

Their remarks were challenged by Poon Man-hon, spokesman for the People's Alliance for Minimum Wage Commission. Poon said that after the implementation of a minimum wage, the unemployment rate had dropped by about half a percentage point to 3.2 per cent.

He also quoted government statistics saying that more than 100,000 people had joined the labour force since the minimum wage came into effect.

The minimum wage should be increased to HK$35 an hour, taking into account factors such as high inflation, Poon said.