Hong Kong employees group wants year-end raise of 5.5pc, but employers say it’s unlikely

Amount was based on calculations involving inflation rate and profit and salary changes in local corporations and groups

PUBLISHED : Saturday, 12 November, 2016, 10:59am
UPDATED : Saturday, 12 November, 2016, 11:01am

An employees group is asking for a year-end salary increase beyond the inflation rate, at 5.5 per cent, though employers warned that such expectations would be difficult to meet.

A survey by the Federation of Hong Kong and Kowloon Labour Unions found that 647 of the 787 participants – who had an average age of 49 and an average monthly salary of HK$15,300 – had received an average pay increase of 3.46 per cent between late 2015 and now.

Another 119 employees – 15 per cent of those surveyed– claimed that they had not received any raise or had their salaries cut in the same period.

Hong Kong comes in third from last in Asia-Pacific index for real wage increases

“The salary increase last year met the inflation rate, yet we believe many employers have the ability to afford a salary increase larger than that,” the federation’s social affairs supervisor Jenny Tam Kam-lin said.

Tam said the amount was based on calculations made after considering the inflation rate and observing the profit and salary changes for 80 local corporations and groups from November 2015 to October this year.

According to Tam, the inflation rate from September 2015 to September 2016 – based on the government’s calculation of consumer price index A – was 3.3 per cent, while the food and housing price indices rose by 2.7 per cent and 5.3 per cent respectively.

“Many of our surveyed employees are from the lower middle working class, and rent could take up more than half of their income. Therefore the way inflation hits their daily living goes past 3.3 per cent,” Tam added.

Talk of an inflation scare is far too premature

But Danny Lau Tat-pong, honorary chairman of the Hong Kong Small and Medium Enterprises Association, believed the recommendation would not be adopted by most small and medium enterprises in the city.

“The economy is not doing any better than last year, so there really is no particular reason why companies would pay more than the inflation rate,” Lau said.

He added that companies in the IT or advertising industries could provide a salary increase higher than inflation as they were generally performing better than the retail, tourism and catering industries.

Simon Wong Kit-lung, executive director of restaurant chain LH Group, echoed this view, saying that his company would likely give employees a raise according to the inflation rate.

“A further increase would depend on the individual’s performance,” he said.