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Hong Kong economy

Hong Kong minimum wage to jump to HK$37.50, in biggest rise since it was introduced

  • Executive Council endorses increase, which was suggested by Minimum Wage Commission last year
PUBLISHED : Thursday, 10 January, 2019, 7:04am
UPDATED : Thursday, 10 January, 2019, 3:07pm

Low-paid Hong Kong workers are set to benefit from the biggest increase yet in the city’s minimum wage, which will jump to HK$37.50 (US$4.80) an hour from May, after a formal endorsement by the government on Tuesday.

The 8.7 per cent rise from the current HK$34.50 was expected to bump up the pay of about 150,000 workers, mostly in security and service jobs. But it reportedly could also add an extra HK$700 million a year to the expenses of the business sector.

The Executive Council endorsed the increase, understood to have been recommended in a report last year by the Minimum Wage Commission, at its weekly meeting on Tuesday, according to a source, who spoke on condition of anonymity because the discussions were confidential.

The 13-member commission is an independent statutory body with members from the labour sector, the business community, academia and the government.

The new minimum will take effect on May 1.

HK$110 wage rise for Hong Kong’s foreign domestic workers

It will be the biggest increase since Hong Kong launched a statutory minimum wage in 2011, which started at HK$28 an hour. The rate is reviewed every two years. The figure rose by 7 per cent to HK$30 in 2013 and a further 8.3 per cent to HK$32.50 in 2015. The government rose the rate by 6.2 per cent to HK$34 in 2017.

Despite the latest increase, Hong Kong’s minimum wage is still far lower than many other developed countries’. Australia has the highest minimum wage in the world, at A$18.93 an hour (US$13.60). The minimum wage in Germany is the equivalent of about US$10.10 an hour. In Taiwan, the minimum wage was recently increased to value about US$4.90.

Mung Siu-tat, chief executive of the Hong Kong Confederation of Trade Unions, said that despite the record high biennial increase, the new rate could not substantially improve the living standards of the lowest-paid.

He said the city’s GDP had grown 17 per cent since 2011, and the new hourly rate would be HK$44 if it grew in line with the economy.

“The bosses have made money, but the employees can’t get a share of the fruits. And the government is reviewing the minimum wage biennially, resulting in a chronic lag in the salaries for the poorest workers, behind the market trend and inflation,” Mung said.

Legislator Felix Chung Kwok-pan, of the pro-business Liberal Party, said the increase had been expected as it was recommended by the commission last year.

“The Executive Council endorsement is only procedural. But it is still an untimely decision because the economic outlook of Hong Kong is much different now compared with several months ago when the commission made the recommendation,” said Chung, citing US-China trade friction.

Last month, a study by Oxfam Hong Kong and Chinese University found that Hongkongers needed to earn at least HK$54.70 an hour to ensure a basic standard of living in the city.

Additional reporting by Gary Cheung