Let’s say HK$28.5

Unbridled excitement sweeps through the corridors of power as the Hong Kong government is able to announce that a consensus on something has formed. This is akin to discovering the Holy Grail wrapped in a blueprint for a perpetual motion machine, and lifting the lid to find that it contains the elixir of life, complete with a hen’s tooth floating around in it. The people behind this amazing breakthrough are the Provisional Minimum Wage Commission, which has decided on a suitable statutory pay floor. The actual figure is a closely guarded secret, namely HK$28 an hour according to most newspapers, but HK$29 if you read the Standard/Sing Tao.

The Commission is an improbable little collection of property billionaires, academics and labour activists formed in February 2009; civil servants with ample experience of herding cats have been at their side throughout, steering the group deftly towards the outcome pre-determined by Chief Executive Donald Tsang – say HK$25 or so. But somewhere along the way, between late 2009 and mid-2010, Hong Kong public opinion took an unexpected turn. After years of viewing property tycoons and many other businessmen as heroic creators of wealth, providers of jobs and protectors of babies and puppy dogs, people suddenly started to see them as rotten, dirty, cheating, thieving scumbag-leech-bastards.

The likely origins of this enlightenment include exasperation among the younger ‘post-80s’ generation; the Lehman minibonds affair, accumulated evidence of a growing wealth gap and, not least, the breath-taking (and maybe ultimately self-defeating) increases in naked greed displayed by property developers. At the height of this shift in popular feeling, Liberal Party legislator Tommy Cheung proposed that the minimum wage be HK$20. He later apologized to the community and recommended HK$24, but he should save the groveling for his voters in the catering industry, and other employers of cheap menial staff. With the proletariat growing restless, Cheung’s comments alone must have added a couple of bucks to whatever Donald’s original figure was.

With prospects of a lower-range number fading, the pro-labour lobby on the Commission presumably felt emboldened to make a bit of a concession from their original high-end demand of HK$33. They know that once it is introduced, the minimum wage is going to be a hot potato impaled on a lightning rod, and it will be a question every year of how much, not whether, it will be ratcheted up.

The employers’ lobby argued for a minimum wage equivalent to 40-45% of third-quarter 2009 median monthly salary, which was HK$11,000 (excluding foreign domestic helpers). That would work out at HK$4,400-4,950; the higher sum works out at a bit over 51 hours of work a week at HK$24 an hour. The bosses’ idea was to “only guarantee workers a minimum remuneration for their work but not a living wage to cover family expenses.” This choice of words implies that employers assume the taxpayer at large will effectively subvent their businesses’ profit margins via subsidized homes and hospitals for the low-paid, and should therefore alienate the middle class as well as the working poor.

Rough calculation based on GDP per capita of HK$233,000, a workforce of 3.6 million and a 50-hour week: GDP per hour per worker = HK$190

It wasn’t that long ago that the Big Lychee’s officials boasted of the city’s lack of a minimum wage; it was as much a matter of pride as low taxes and the rule of law. And now it has come to this.

Globalisation, modern technology, the immigration of unskilled mainlanders and colonial under-investment in education have all played a part. But the extra tilting of the Hong Kong playing field in favour of established, largely property-connected, business interests since the new order took over in 1997 must take much of the responsibility. As ye sow…

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9 Responses to Let’s say HK$28.5

  1. Gideon says:

    I think some exclusions from the minimum wage should be set and the the maximum tariff of HK$ 10.00 should prevail for:

    1. PCCW staff (especially hotline customer non-service);
    2. Taxi drivers (tell them to get a real job and stop clogging up our roads);
    3. Traffic wardens (new incentive bonus scheme – 100 dollars per legal ticket).

    I am sure this list of exclusions could be extended.

    Moreover a maximum rate for lawyers, dentists, medical specialists, lecturers and judges should be set at say HK $ 3000 per hour. That should make them wince.

  2. Maugrim says:

    Was that a SHK Kwok I saw on the Commission? Good to see them getting a grassroots opinion /sarc. I can’t believe we live in a society where it is openly admitted that the minimum wage isn’t meant to cover family expenses to the extent I had a look outside the window to see if I was in 18th century England during the Industrial Revolution. Godwin would be pleased.

  3. Longtimenosee says:

    Minimum wage in UK for over 21’s will be HKD 71.10 per hour from October.

    But then, a single bus ticket is HKD 24 in London versus, say HKD 3.40 here and with option to take the tram at HKD 2.

    Lunch in a cafe/fastfood in the UK would be min of HKD 60, where its possible to have a meal in HK for half that.

    Perhaps we will all just end up with parity to other expensive cities??

  4. Stephen says:

    Doubtless we will hear bleating from the Councillors Tommy & Vincent that half of Hong Kong’s restaurants will close – similiar to their dire predictions last summer when anti smoking legislation came into effect.
    Would be nice to see some ‘Manilla Bus Tragedy’ cross party unity and agreement that this figure should at least be the very modest $33 that the unions asked for. Fat chance…

  5. Jack Russell says:

    Food and property are generally cheaper in UK than in HK. And in retirement, old folks can travel all over the country by bus for free, every day.

  6. Landlord says:

    Longtimenosee….. you are right, but cost of dirty stinking 400 ft hovel in which to live in UK (excluding London perhaps) – very little, cost of same hovel in Hong Kong, millions of dollars to buy, thousands of dollars a month to rent.

    I’ll pay for more expensive bus fares, thanks

  7. Longtimenosee says:

    Playing devils advocate here, but property prices being sky high in price & tiny in size can at least be partly attributed to having the highest population density in the world, while also having a high GDP.
    London is extremly expensive without property cartels, so market forces have to take a good amount of the ‘blame’.

    Historically speaking, the reason why it worked in HK (low wages), is because there were several wage earners under the same roof. As we move towards the premise that every man & women should own their own property, rather than just a family owning…then you need to have higher wages to sustain that dream.

    I would like to see a graph showing average number of people to household over the years.

  8. Landlord says:

    London is very expensive which is why I excepted it in my previous comment. Even so, you can buy a two bedroom 800 sq ft apartment in a desirable central district of London for equivalent of HK$ 4.5m – you can’t do that in Hong Kong (in a central desirable location).

    Leaving aside things like transport costs where indeed it is cheaper to get a bus in Hong Kong than in London (but it is far far far more expensive to get a flight out of Hong Kong than an equivalent one out of London), virtually everything else here is much more expensive, courtesy of high property prices and the property based cartel. Example, one LG TV bought by yours truly in Hong Kong recently, HK$28K (from the property magnates electronics outlet, naturally), Equivalent TV in UK (not the same, because they have higher spec stuff there) just shy of HK$12,000.

    Of course this probably doesn’t concern minimum wage earners in Hong Kong (but it might in UK) Nevertheless, I’ll still pay higher bus fares, thanks

  9. stefano4459 says:

    Miriam Lau (Lib Party Head) warns that the wealth gap is increasing while Tommy C believes $20 is adequate – both Liberace Party – go figure!

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