The minimum wage has been with us for almost a year - the outcome of a prolonged and bitter public tussle between employers and employees. Now it is due for review. Round two looks no easier than round one.
The posturing has already begun. Employees and their advocates want it adjusted upwards, to HK$35 per hour, from the current HK$28. Employers are countering with claims of economic hardship for their business.
Unfortunately for the employers, their dire predictions of massive lay-offs and business closures did not materialise following enforcement of the legislation. Not only that, the new measure has generally been considered an unqualified success, bringing about an improvement in the living standard of low-wage earners without inflicting any significant injury on small and medium-sized businesses.
In fact, the latest employment figures show that there has been a healthy increase in the working population, with the jobless rate kept at a reasonable level. For the first time, low-wage earners have begun to share in the fruits of their labour and the largesse of business success. Against this rosy picture, any warnings from the employers are likely to be seen as crying wolf again.
But what worked last time may not work equally well this time. SMEs might have had a sufficient financial cushion to absorb the previous wage increase. But small businesses don't have an infinite capacity to absorb sizeable wage rises.
Among other things, they face severe rental pressure, the result of the government's high-price land policy. Another significant jump in the payroll may see them edge close to the limit of survival.
