A statutory minimum wage remains anathema to champions of Hong Kong's economy as one of the freest in the world. But a growing waelth gap has fuelled the argument for introducing one. The government has tried to defuse it by signing employers up to a voluntary 'wage protection movement' to ensure people in two lowest-paid occupations, cleaners and security guards, are paid at least the median wage for the job. Chief Executive Donald Tsang Yam-kuen has said he will introduce a minimum wage for these groups if the scheme is deemed a failure. It still has six months to run. A disappointing response from employers and subcontractors makes it unlikely it will be judged otherwise. A free labour market will have prevailed, but at the cost of achieving the overriding object of ensuring a better deal for some of the poorest-paid workers in our community. The latest to dismiss the wage protection movement as a failure and call for legislation on a minimum wage for cleaners and security guards is Executive Council convenor Leung Chun-ying. Only 1,000-odd companies, covering about 30,000 of the city's estimated 150,000 cleaners and security guards, have signed up to pay them the median wage. Subcontractors have resorted to using different job titles for the same work in order to pay them less. Unless there is a sudden improvement in the results from the scheme over the next six months, the government will have little alternative to making good Mr Tsang's promise. The wider case for a statutory minimum wage, however, is not so straightforward. Some legislators have long argued for one. But officials have maintained that a minimum wage would be counterproductive because it would reduce flexibility in the labour market, lead to job cuts for low-skilled workers and stifle economic development. The case for an unregulated, flexible labour market is compelling in a world obsessed with productivity and competitiveness. Socially and politically, however, the case for a minimum wage is arguable if the wealth that is generated is not fairly shared. The economic arguments for it remain dubious. There seems little doubt it would result in some who are prepared to accept very low wages being unable to find any work at all. Nonetheless, a consensus in favour of minimum wage on social and political grounds is growing. After all, such legislation has been introduced elsewhere without dire economic consequences, including on the mainland. The business community is right to argue that there are other means of helping the poor and unskilled without forcing employers to pay higher wage bills that would undermine competitiveness. But it needs to engage in debate on longer-term approaches to structural problems in the labour market, such as education and training to lift the earning power of the low-skilled, and a wage structure that interfaces sensibly with welfare assistance. People must be encouraged - and empowered - to find work rather than fall back on welfare payments indefinitely. The failure of the wage protection scheme seems likely to lead to minimum-wage legislation for cleaners and security guards. That would be the right move, given the chief executive's promise. But further debate is needed before broadening the scope of such laws. Hong Kong should think carefully before making fundamental changes to a recipe for economic success which has stood the test of time.
