Minimum wage has had minimum effect for working families, Oxfam says

Oxfam report says the wage floor has failed to lift working families out of poverty, as the city gets ready for HK$2 increase to HK$30 tomorrow

PUBLISHED : Tuesday, 30 April, 2013, 12:00am
UPDATED : Tuesday, 30 April, 2013, 7:40am

The minimum wage has failed to lift working families out of poverty, according to an Oxfam report.

Based on figures from the Census and Statistics Department, the report said that in the fourth quarter of last year, over 170,000 families who were being supported by at least one working person were living in poverty. These families had a monthly income that was less than half the median average among other families of the same size.

The number has just slightly decreased by 800 compared with two years ago when the minimum wage came into effect, and it amounts to 8.8 per cent of all the working households in the city, Oxfam said.

"The original intention of the minimum wage was not to enable one person to support a family; the government has always said it was to prevent a constant drop in wages," said Wong Shek-hung, acting Hong Kong programme manager at Oxfam Hong Kong.

Nearly 65 per cent of these families had children aged 18 or under, which was much higher than the 38 per cent figure among all families with working members. In these poor working families, one worker has to support two family members, compared to the average Hong Kong family where one worker supports roughly one other person.

Wong also explained that the minimum wage had not been much help because it had been offset by inflation. The minimum wage was set at HK$28 per hour and will be lifted to HK$30 an hour from tomorrow.

Among the 170,000 working families in poverty, about 90,000 households had monthly earnings less than the corresponding level of Comprehensive Social Security Assistance, but only about 10,000 of them were receiving the financial help.

Stephen Fisher, director general of Oxfam Hong Kong, said that these families were reluctant to claim CSSA due to a fear of being thought less of. He stressed that CSSA was not the best means by which to help them.

"When we are helping the poor, the top consideration is not to let people fall into the CSSA net, as it will be very difficult to motivate people to get out of the net," he said, adding that poverty relief measures should be targeted more towards a certain group of people.

The organisation proposes the government set up a low-income-family subsidy to help these families in need, and that each child in eligible families gets HK$800 a month.

The group estimated that 180,000 people under 18 years of age could benefit from a subsidy, and that the annual cost would be about HK$1.73 billion.

The Labour and Welfare Bureau said the subsidy might have a great impact on the social security system and government budget. It said the Commission on Poverty would come up with a detailed study on the proposal.