Hong Kong’s new minimum wage formula won’t hurt companies’ bottom line, labour chief says
- Minister Chris Sun says mechanism will not affect city’s competitiveness because composition of formula both protects vulnerable and ensures affordability
- Business sector had expressed concerns of increased financial burden, especially in bad economic times when workers’ wages could not be adjusted downwards
Hong Kong’s labour minister has defended the new formula for adjusting the minimum wage, insisting the rate will not affect companies’ bottom line because employers can afford it.
Secretary for Labour and Welfare Chris Sun Yuk-han said on Saturday the mechanism would not hurt the city’s competitiveness because of the composition of the formula.
“It has taken into account, on the one hand, the need to protect those earning the minimum wage ... and also ensures, at the same time, that the business sector finds it affordable and acceptable,” he told a radio programme.
“It has already struck a balance between different needs and demands. So, we believe it shouldn’t affect the overall competitiveness of our business sector.”
The annual adjustment rate will be the consumer price index (A) plus 20 per cent of the difference between the latest real gross domestic product growth and the trend growth in the past decade, subject to a cap of 1 percentage point.
If the formula produces a negative number, the minimum wage will be frozen.