Leung Chun-ying

Minimum wage increase proposal to be put to Legco

Chief executive criticised for accepting a HK$2 rise for the low-paid when he could have asked for more; over 220,000 workers set to benefit

PUBLISHED : Thursday, 13 December, 2012, 12:00am
UPDATED : Thursday, 13 December, 2012, 3:31am

Chief Executive Leung Chun-ying and the Executive Council have agreed that the minimum wage should rise HK$2 to HK$30 per hour.

The proposal is scheduled to be submitted to the Legislative Council next Wednesday, and the government expects the new level to come into force on May 1.

Leung's acceptance of the Minimum Wage Commission's suggestion was criticised by unionists, who said he could have used his power to push for a bigger increase.

Secretary for Labour and Welfare Matthew Cheung Kin-chung described the chosen amount as suitable and moderate. He believed that it would not be delayed by lawmakers' filibustering, as happened to the Old Age Living Allowance proposal.

"This is a reasonable level … and I am confident it will receive support in Legco," he said.

He expected that more than 220,000 people, or 7.9 per cent of the working population, would benefit. But that is well short of the 320,000 that the government had estimated earlier.

Cheung said the new estimate was calculated using this year's government figures while the old one was calculated with last year's figures.

That fewer people would benefit was a "happy scenario", he said, as it meant pay had gone up in the past year. Companies would need to fork out an additional HK$2 billion a year under the new wage level, about 0.3 per cent of total wages, he said.

And if overall economic growth was 1 per cent for the first half of next year, the overall unemployment rate would rise only 0.3 per cent as a result, Cheung said, with inflation being boosted by 0.3 per cent to 0.4 per cent.

Unionists have been calling for the minimum wage to be reviewed every year, but Cheung said the present two-year cycle offered flexibility.

Minimum Wage Commission chairman Jat Sew-tong also said that HK$30 was a suitable level and he hoped Hongkongers would support it.

But Sze Ching-wee, spokesman for the People's Alliance for Minimum Wage, said he was dissatisfied. Although the new level was suggested by the Minimum Wage Commission, Leung had the power to decide on a higher level and should have done so, Sze said.

Labour Party chairman Lee Cheuk-yan said HK$30 was not even enough to buy a lunch box.