Hong Kong’s minimum wage has once again entered public debate after an independent statutory body ended a six-week consultation on the hourly pay on Tuesday. The Minimum Wage Commission will submit its recommendation to the government in October, which will then decide whether to adjust the existing pay level. Here are some of the concerns and controversies related to the current review: What is behind the controversy on Hong Kong’s minimum wage? The commission on Tuesday ended its six-week public consultation, under which residents were invited to give their opinion on whether the hourly basic rate should be adjusted. The consultation is part of a new round of the biennial review conducted by the commission, which is expected to submit its report to the chief executive by the end of October. Hong Kong NGO urges government to raise minimum wage, calls for annual review Hong Kong’s minimum wage was left unchanged at HK$37.50 (US$8) in 2021 when it was last reviewed, marking the first time the figure was not increased since it was introduced in 2011, with authorities citing a struggling economy battered by the coronavirus pandemic. The policy was introduced to protect low-income employees, with the pay initially set at HK$28, before gradually rising to the current amount in 2019. Concern groups and workers have long criticised authorities for keeping the minimum wage at its current level, urging them to raise the amount further to match rising inflation and the cost of living. They have also called for an annual review of the rate instead of the current biennial process. What does the labour side want? According to the Society for Community Organisation (SoCO), the minimum wage should be raised to at least HK$50 an hour so that it is more than 60 per cent of the median monthly one-person household expenditure of HK$16,000. The NGO said it hoped the base pay could be increased to HK$58 per hour in the long run, putting the minimum monthly income over 60 per cent of the median monthly one-person household income of around HK$18,000. In a letter to the commission, SoCO and other grass-roots organisations also urged the government to review the wage every year to reduce the impact of inflation. SoCO also called for a poverty impact assessment when evaluating the minimum wage level, saying it would allow for a better understanding of how the pay would affect the city’s poverty rate. Statistics from the commission showed that 14,300 employees, who mostly worked in property management, retail and catering industries, only received the base hourly pay in May and June of 2021. What do employers think? The Hong Kong Small and Medium Enterprises Association, one of the city’s business groups, said it believed the current minimum wage should be increased by 9 per cent to HK$41 per hour. “Our target is to offset inflation in the last four years. This is what we call acceptable,” said Danny Lau Tat-pong, the association’s honorary chairman. Lau added that a rise would impact businesses in two ways, namely an increase in labour costs and a “ripple effect” where employees with a salary close to the new minimum wage would ask for one that was higher than the base level, while pay for low-income workers would be adjusted upwards. Labour minister calls yearly review of Hong Kong’s minimum wage ‘unfeasible’ He added that the market would regulate itself, and that the government only needed to set the baseline with the minimum wage. “Each industry has their own unique characteristics and they have their own difficulties in hiring,” Lau said. “If that difficulty is higher, you can only attract people to work for you by raising the wage.” The idea of the market self-adjusting was also shared by catering sector lawmaker Tommy Cheung Yu-yan, who said in a newspaper column in April that the minimum wage was “sugar-coated poison” used by politicians to win votes, adding that he was in favour of freezing the hourly pay level. What are the government’s views? The government has defended its approach towards the minimum wage, with Secretary for Labour and Welfare Law Chi-kwong responding to several concerns in a Sunday blog post. Law wrote that an 8.7 per cent increase to HK$37.50 per hour in 2019 marked the largest rise since it was introduced. He noted that the wage had increased from HK$28 per hour in 2011 to HK$34.50 per hour in 2017, up by 23.3 per cent, which was higher than the city’s inflation of 20.4 per cent during the same period. Hong Kong’s hourly minimum wage frozen at HK$37.50 The Labour minister also dismissed requests for an annual review of the minimum wage, calling the move “unfeasible”. “To conduct an annual review, the process of research, analysis and consultation would have to be greatly compressed, or the statutory minimum wage level would have to be adjusted by an equation instead,” he wrote. “The former needs a technical adjustment under the existing framework, while the latter requires major surgery to overturn the current framework and reestablish social consensus.” He added that the commission needed to balance between preventing extremely low wages and reducing the loss of low-income jobs, while also considering how to maintain the city’s economic development and competitiveness.