Real pay marching backwards for many workers in Hong Kong

PUBLISHED : Thursday, 01 May, 2014, 4:21am
UPDATED : Thursday, 01 May, 2014, 7:39am

There is a good reason for Hongkongers to join today's Labour Day march - many earn pay cheques that are lower than they were 15 years ago when adjusted for inflation.

Pay adjusted for inflation in 11 out of 29 jobs was lower in 2013 than in 1999, according to a Census and Statistics Department's report last December.

Real pay is pay after taking into consideration the effects of inflation on purchasing power. For example, a 2 per cent raise coupled with 1 per cent inflation means that real pay rose by just 1 per cent.

"Workers in Hong Kong are having a terrible time," Labour Party chairman Lee Cheuk-yan said. "Every time the city goes through a financial crisis, they get a pay cut of 20 to 30 per cent. But their pay goes back up as slowly as how ants crawl."

Inflation over the past 15 years had risen about 45 per cent, Chinese University economics professor Terence Chong Tai-leung estimated.

Economists say workers ultimately pay the price for the monetary stability provided by the peg to the dollar. While free floating currencies elsewhere fall to help economies adjust to external competitive pressures, wages are the primary way in which Hong Kong's price levels adjust to help the city stay competitive.

According to the census department, real pay for those in food and beverage manufacturing - the hardest hit sector - was 29.6 per cent less in 2013 than in 1999.

The second-most hardest hit group were those working in movies, video and television programme production, sound recording, music publishing, programming and broadcasting, who earn 24.4 per cent less in real terms. People working in information technology service and information service activities make 11.9 per cent less; while those in education make 8.2 per cent; and food and beverage service jobs pay 4.2 per cent lower.

Lee said the government had done nothing to alleviate worker hardship except putting in place the minimum wage law in 2011, which he described a "small fix" .

The minimum wage was set at HK$28 an hour in 2011, climbing to HK$30 last year.

"The government has done almost nothing over the years to tackle social inequality. And now it is even making the lives of local workers difficult by making labour importation easier," Lee said. He was referring to the plan announced in March to shorten the time it takes contractors to get approval to bring in workers from 7½ months to six months.

A Labour Department spokesman quoted acting chief executive Carrie Lam Cheng Yuet-ngor as saying that the earnings of low-income workers had improved since passage of the minimum wage law, and the number of employed people had also risen steadily.

Lo Tang-king, executive committee member of the Catering and Hotels Industries Employees General Union, said it was not just the low pay that made workers' lives difficult.

The dim sum maker lives in Yuen Long and commutes two hours daily to work an 11-hour shift - from 4am to 3pm - in a Hong Kong Island restaurant. "My working hours are upside down. I have nothing to do apart from working and sleeping," she said. Her pay has risen from HK$8,000 in 2002 to HK$15,700.

Simon Wong Kit-lung, executive director of the restaurant empire LHGroup, said the challenges the industry faced made it difficult to offer heftier wages.

In the 1980s, he said it was common for Hongkongers to splurge more than HK$10,000 for a feast. But now restaurants competed against each other to offer feasts for as little as HK$1,688.

Adding to the challenges for the industry, rents have soared by almost 170 per cent since 1999, says the census department.

Wages have boomed in other industries. The figures show that real pay for insurance employees is 57.7 per cent higher than in 1999; financial mediation is 43.1 per cent higher; and retail is up by 29.2 per cent.

The Confederation of Trade Unions' Labour Day march starts from Victoria Park at 2pm today.