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Martin Wong

Hong Kong's vast income gap means it cannot apply a simple formula commonly used elsewhere when setting its first minimum wage, an academic says.
The debate on pegging the minimum wage to a certain level of the median wage has intensified after a Census and Statistics Department  survey found that the  median hourly wage of local workers is HK$58.50.
In Britain,  which  the Provisional Minimum Wage Commission   visited in a study tour in  October, the  minimum hourly wage is GBP5.80 (HK$68) -  47 per cent of the median salary. 
The ratio of  minimum wage to  median earnings in Japan is 33.3 per cent.
University of Hong Kong demographer Dr Paul Yip Siu-fai  said it would be wrong to apply these ratios to Hong Kong, adding that the minimum hourly wage should be set between HK$19.50 and HK$27.50.
'The earning distribution is different in various places. The same ratio will have a very different effect on the labour market in different places. And we should note that the city's rich-poor gap is so huge,' he said.
Hong Kong's Gini coefficient  - which measures income inequality on a scale of 0 to 1, where 0 is perfect equality and 1 is perfect inequality  - rose from 0.518 in 1996 to 0.525 in 2001 and stood at 0.533 in 2006,  the most recent year for which data is available. 
'The gap between the rich and the poor in the city is one of the highest in the world. If we simply set the minimum rate at about 40 per cent like other places, such a gap will be  widened,' Yip said.
His comments came as many business groups have been pushing for a minimum rate of HK$24 - about 40 per cent of the median wage. 
Dr David Wong Yau-kar,  president of the Chinese Manufacturers' Association,  said the group would need more time to study the latest figures before proposing a minimum wage level, but noted that in many developed countries it was 40 to 45 per cent of the median wage. If  these ratios were applied to Hong Kong, the minimum wage would be HK$23.40  to HK$26.30 per hour. 
Unionist legislator Lee Cheuk-yan, who  called for the rate to be set at HK$33, said the commission should consider the city's high cost of living. 
'We should also think of the many low-paid workers trying to feed their families,'  he said. 
The census found 469,400, or 16.9 per cent, of the city's 2.78 million workers  were paid less than HK$33 an hour. Some 130,200 earn less than the HK$24 that many business groups are demanding.
The Provisional Minimum Wage Commission  reiterated yesterday it would consider a wide range of  factors - including economic and labour market conditions, standards of living and competitiveness, unemployment and inflation and social harmony - before setting the statutory minimum wage in July.
Lawmakers meanwhile debated  the calculation of work hours and commission arrangements during a committee meeting on the minimum wage bill yesterday.  
Tourism legislator Paul Tse Wai-chun  said it was difficult to calculate the working hours of tour guides  conducting organised tours overseas. 'Should the stand-by hours also be counted? Should the time spent on waiting for transport also be included as work hours? There are so many unclear areas,' he said. 
Audrey Eu Yuet-mee  said she was concerned  that workers on low basic monthly salaries relied on irregularly paid sales commission. She said employers might cut commission to subsidise any pay rise required to meet the minimum wage.
Assistant commissioner of labour Fong Ngai   said wages included all remuneration and allowances, including commission, overtime pay and tips under the existing Employment Ordinance.
Number crunching
The median hourly wage, in Hong Kong dollars, of local workers found in a recent Census and Statistics Department survey is: $58.50



Minimum wage formula 'won't work for HK'