Struggling to make ends meet? Switching to a new job may lead to a higher raise than staying put
- An increment of 1.9 per cent in real terms works out to HK$319.2 per month, hardly enough to cover mortgage payments which will rise by about HK$1,000 per month next year
- Job switchers can expect up to 15 per cent premium when they jump ship, up to 30 per cent if they are experienced in blockchain, AI or fintech, Robert Walters said
The cost of living in Hong Kong is outpacing salary increments in Hong Kong, as the end of cheap loans combines with a US-China trade war to weigh on business sentiments, putting a cap on the increments for salaried employees.
Employees in the city will receive increments of between 3 per cent and 5 per cent in 2019, according to Robert Walters’ research released on Wednesday. A median raise of 4 per cent works out to an increase of 1.9 per cent after inflation, according to a separate study last week by ECA International.
“That is definitely not enough, so it’s going to be tough especially for those who need to service their mortgages,” said Kenneth Leung Kai-cheong, a local lawmaker who represents Hong Kong’s accounting industry. “Many companies are being cautious because of the US-China trade war, so the 2019 pay increment is likely to be low.”
Hong Kong, the world’s most expensive urban centre to live and work in, also has one of the widest income gaps among developed economies, with one in five of the city’s 7.5 million residents classified as being destitute.
A 4-per cent raise on a median monthly salary of HK$16,800 (US$2,146) works out to HK$672 more in the pocket every month before tax, or HK$319.20 after allowing for inflation.
That is hardly enough to cover rising mortgage payments, which will weigh on borrowers as the Hong Kong Monetary Authority is expected to raise the city’s key interest rate by a full percentage point in 2019, as it must follow the US Federal Reserve’s monetary policy in lockstep to maintain the local currency’s peg with the US dollar.