Hong Kong’s minimum wage workers to be paid HK$3 an hour more, and no one is happy about the increase

Bosses claim extra funds will cost them HK$700 million a year, while labour unions call rise to HK$37.50 an hour shameful

PUBLISHED : Friday, 28 September, 2018, 4:48pm
UPDATED : Friday, 28 September, 2018, 11:14pm

Hong Kong’s hourly minimum wage is expected to increase by HK$3 an hour, with government advisers reaching an agreement after “fiery” discussions.

The impending change has angered labour unions and the business sector alike. If approved by government, the rise will add an extra HK$700 million a year to the expenses of the city’s businesses, a source said.

Union leaders meanwhile have slammed the meagre increase to HK$37.50 (US$4.70) an hour as “shameful”.

“Hong Kong’s grass-roots residents are still stuck in poverty [despite the raise],” Lee Cheuk-yan, general secretary of the Confederation of Trade Unions said.

During the Minimum Wage Commission’s talks, representatives of employers initially only agreed to a rise to HK$36 per hour, leading to the talks getting more heated.

A source, who was not authorised to speak on the matter, said if backed by lawmakers, the new minimum wage would take effect on May 1, next year.

“Many rounds of meetings have been held,” the source said. “But in the end, all members have recently reached a consensus on the new level.”

The commission is expected to submit a report to the government by the end of October. It has not officially announced the new level yet, and members were not allowed to disclose it.

Will increasing Hong Kong’s minimum wage help struggling part-time workers?

Official figures show about 150,000 people presently make less than HK$37.50 an hour, working in security guard and service staff jobs.

A statutory minimum wage of HK$28 an hour first came into force in 2011. Since then increases have always outpaced inflation, and the figure rose to HK$30 in 2013, and to HK$32.50 in 2015, before becoming HK$34.50 last year.

Unionists have demanded HK$44 an hour – pointing to Oxfam Hong Kong’s 2016 calculations of monthly living costs for a two-person family, and taking into account the government’s consumer price index for poor families.

A living wage would be at least HK$42 per hour or HK$9,828 a month with 26 nine-hour working days.

Veteran unionist Lee pointed to how Taiwan and South Korea looked set to raise their minimum wage to HK$38 and HK$58 respectively.

Hong Kong’s new minimum wage is far too low

Hong Kong, as a well-developed economy, could do much better Lee said, urging the government to review the wage every year, instead of biennially.

Catherine Yan Sui-han, convenor of the Environmental Services Contractors Alliance, which represents 90 per cent of the city’s cleaning companies, was outraged at the new level.

“It’s a big blow to the business sector,” she said. “The new level will just drive up inflation.”

She said most cleaners are paid above the minimum wage level, at HK$42 an hour. But, she warned of the “ripple effect”, and said those making more than the minimum wage would ask for a raise if they saw lower paid colleagues get a salary bump because of the change.

“If you don’t offer a raise, they would just leave. That’s a problem because the industry is already facing a shortage of workers,” Yan said.

Employers who are convicted of failing to pay the minimum wage will be fined, and jailed for up to three years.