Hong Kong minimum wage rise to benefit working poor
A rise of HK$2.10 (US$0.30) in the hourly wage may seem shameful in affluent Hong Kong. But for the tens of thousands of the lowest paid workers, the proposed increase in the statutory minimum wage is to be welcomed. That is good news for the city's so-called working poor, such as cleaners and security guards.
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The new wage floor will rise by 5.25 per cent to HK$42.10, the first increase since a new formula for adjustment was passed last year. It will come into effect on May 1, Labour Day, subject to approval by the Legislative Council.
The mechanism is linked to the consumer price index and economic growth, which is seen as a better way to ensure low-income employees can share the city's economic fortunes and guard against erosion of their standard of living caused by inflation.
If the immediate response from business appears to be mild, it is because of the relatively moderate impact on the economy. It is estimated that the number of workers earning hourly wages below the new rate is around 22,100 to 36,700, representing about 0.8 per cent to 1.3 per cent of all employees.
The actual number of beneficiaries, however, is likely to be greater because companies are at the same time expected to adjust wages of those at higher levels to maintain wage differentials.
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According to the Minimum Wage Commission, sectors with most low-paying jobs are set to fork out an additional HK$170 million to HK$230 million, representing about 0.12 per cent to 0.15 per cent of their total wage bills.
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