Hong Kong’s Minimum Wage Bill May Fall Short of Expectations

September 5, 2010 10:22 pm Last Updated: October 1, 2015 7:07 pm

A group of domestic helpers protest for a minimum wage outside the Legislative Council in Hong Kong on July 14. (Mike Clarke/Getty Images)
A group of domestic helpers protest for a minimum wage outside the Legislative Council in Hong Kong on July 14. (Mike Clarke/Getty Images)
HONG KONG—The highly debated minimum wage bill in Hong Kong is a step closer to becoming law, as the Provisional Minimum Wage Commission prepares to submit their decision to Chief Executive Donald Tsang.

Meanwhile, Chairperson of the Commission Teresa Cheng Yeuk-wah refused to reveal the actual wage figure. Sources say it will be set at around HK$28 (US$3.60) per hour—$5.00 less than the publicly demanded $HK33 ($US4.25) rate.

Cheng emphasized that all members came to an agreement for the first time since the commission was established in February 2009.

Cheng said the decision came after careful consideration of multiple factors.

“The wage level is set after considering data from different sources, including the information from the Census and Statistics Department, opinions expressed by concerned groups, as well as experiences from countries that regulate minimum wages,” said Cheng.

In recent times, Hong Kong has struggled to maintain its affluent status, with a 2009 study indicating that a record number of residents have fallen below the poverty line.

According to the Hong Kong Council of Social Services research around 1.23 million, or 17.9 percent of the population of the city of 7 million, are considered poor, with the elderly and teenagers being the worst hit.

The study defined poverty as earning half or less than half of the average monthly income, set at HK$3,300 (US$425) for a single.

The proposed HK$28 hourly rate will give an estimated monthly income of HK$5,000, based on nine-hour days, 5 days a week.

Demands for Higher Pay

Some lawmakers, however, have refused to accept the allegedly compromised decision to power the minimum wage.

Legislative Council (LegCo) Member Leung Yiu Chung of The Neighbourhood and Workers Service said if the level is really set at $HK28, “it’s definitely not ideal.”

Leung believes that at $HK28 wage level, only 210,000 workers will benefit from the regulation, leaving another 200,000 out of the loop.

There is also the concern that the lowered limit will give employers the excuse to lower the wage for those who are paid more than $HK28.

Having fought for statutory minimum wages for almost three decades, Leung said the long fight is due to the fact that he doesn’t want workers to be exploited.

However, he pointed out that LegCo members have limited authority, and can only vote “yes” or “no” on the matter.

“They do not have the right to revise [the bill],” he says.

Hong Kong Federation of Restaurants and Related Trades Chairman Simon Wong is concerned that by setting the minimum wages at HK$28 will cause pressure on the operations of small restaurants.

While jobs with hourly wages lower than $28 are still available on the website of the Labor Department, it is believed that these jobs will disappear after the regulation of minimum wages takes effect.

At present, Hong Kong has about 310,000 workers holding wages at $28, which constitutes 11 percent of the working population.