AND HERE is a little something that could possibly make you look again and say: 'Are you sure? That's not the way I heard it.' What you have probably heard is the reason shopkeepers are complaining of slack business is cuts or freezes in wages and salaries across the SAR. People have neither the money to spend nor the inclination to do so when our economy is slowing and the pundits speaking of worse to come. I grant you that people may not have the inclination when they are worried about the future, but the available figures say it is not true that they do not have the incomes. Look at the first chart. That short red line on the right side of the chart gives our nominal wage index over the past two years and, indeed, it says wages have remained flat throughout. Notice, however, that it says wages on average have not fallen. Some have gone down but others have still gone up and it all roughly balances out. The important thing to the wage earner, however, is how much he or she can actually buy with that wage, and remember here that consumer prices have fallen since May 1998. This is taken into account in the real wage index, the blue line in the chart, and just look at how sharply it has risen since that time. What these figures tell you is that the overall buying power of the wages people make has improved more markedly over the past three years than almost any other time on record. Look at it another way. Take the official figures on the average wage of an unskilled construction worker (HK$632 a day at present) and look how much it has grown annually in percentage terms over the past 10 years. This is shown in the blue line of the second chart, and notice that as of August it was still rising. Now compare this with the year-on-year percentage change in the consumer price index over the same period. Yes, that wage growth fell dramatically in 1999, but at nowhere near the same rate that consumer prices fell and construction workers are still seeing their circumstances improve steadily. In fact, these figures say that since the outbreak of the Asian financial crisis in mid-1997 unskilled construction workers have seen the buying power of their wages improve by 28 per cent. I grant you that it all seems highly unusual. Surely there must be an error in here somewhere. It is completely at odds with what you hear in conversation every day. Perhaps some figures have been falsified or employers have found other ways of docking pay. Perhaps we are looking at it the wrong way. I don't know. All I do know is that if you want to dispute these figures then take it up with Frederick Ho, the Commissioner for Census and Statistics. He has a large staff of people dedicated to getting these sorts of numbers right, and I have never had much success in trying to prove them wrong. If you succeed in doing it, please tell me. Graphic: jake23gbz
