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Hong Kong economy
OpinionLetters

LettersGive Hong Kong’s economy a boost with this one simple step

  • Readers discuss the benefits of increasing the city’s minimum wage, and the economic and social harm wrought by cyberbullying

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People in masks stand on the Mid-Levels escalator in Central in 2020. Photo: Nora Tam
Letters
On January 20, the International Monetary Fund’s report on Hong Kong recommended
various initiatives for the city to implement.

The government has been adopting a Keynesian approach during the challenges that the 2019 protests, followed by Covid-19, created. However, a shift to a supply side approach is clearly warranted.

We have 1.6 million residents living below the poverty line – around 20 per cent of the population. We have a minimum wage of HK$37.50 per hour – without a cap on how many hours a person can work, which is absolutely insufficient in one of the most expensive cities in the world.
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Germany is considering raising the minimum wage from €9.82 (HK$86) per hour to €12. In the context of Hong Kong’s minimum wage, Germany’s minimum wage could be increasing from 2.3 times our minimum wage to nearly three times. Some US states and companies are paying a minimum of US$15 an hour, which is three times our minimum wage.

Increasing the minimum wage for hourly workers to a level that begins to correlate to the high cost of living in Hong Kong will only benefit the economy and society at large. While bosses might be perturbed, the economic and societal benefits far outweigh their potential concerns.

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Higher disposable income will create a higher propensity to consume which in turn will boost aggregate demand, aggregate supply and ultimately gross domestic product, not to mention pulling many out of the vicious circle of the poverty trap.

Let’s hope our newly instated Legislative Council can see one easy way to improve the quality of life for Hong Kong.

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