Wal-Mart and the Hong Kong government both benefit from the use of economies of scale to reduce their operating costs. However, they are at opposite ends of this scale.
Wal-Mart, as 'The price of wall-to-wall Wal-Marts' (May 9) reminded us, is the world's largest retailer, using bulk quantity to achieve cheap prices. The Hong Kong government, in contrast, outsources work to stay small.
Despite this difference, they achieve the same end: reduced labour costs. Wal-Mart workers are fighting for a living wage and Hong Kong cleaning crews for wage protection.
Wal-Mart's expansion and omnipresence reduces competition in the job market. People have fewer choices of where to work and wage cuts are inevitable.
Without a minimum wage in Hong Kong, companies bidding for outsourcing work from the government keep wages low to increase the cost-attractiveness of their tenders.
In the end, Wal-Mart may have the advantage, in that it is not liable for the consequence of a shortfall of income among its workers, while the Hong Kong government ultimately is. Contract workers short-changed in their wages by one government department go to get handouts from another when poverty sets in.
Increasingly, Wal-Mart is under public scrutiny to improve its work conditions and benefits. The Hong Kong government should halt outsourcing until legislation governing minimum wages and maximum work hours is in place.
