The Statute of Labourers of 1351, it reminds us here, was passed by the English parliament under Edward III. The aim was to ban increases in wages after workers became scarce – owing to a hellish plague of black boils. It complains that…
…the servants having no regard … but to their ease and singular covetousness, do withdraw themselves from serving great men and others, unless they have … wages double or treble of what they were wont to take…
It didn’t work, and to the extent it did, it encouraged the Peasants’ Revolt.
Over 650 years later, and Hong Kong’s Financial Secretary John Tsang wallows in his medieval forebears’ benighted ignorance of basic economics. Low-skilled workers’ salaries are rising, he declares, citing HK$12,000-a-month pay levels for dishwashers. At which point, he should say no more – just sit back and bask in the public’s admiration of the good job he has done. Because, surely, as the official in charge of economic policy, his priority should be to spread opportunity and prosperity.
But no. In the perverse world that is the Hong Kong political system, it seems that the FS thinks he has failed if the economy gives the less well-off a route out of poverty (or non-starvation pay, or whatever you call HK$12,000 a month). The reason: some small-medium companies are finding it hard to pay these wage levels.
If this is the case, it is because other companies are luring the workers away by offering higher pay. What John Tsang should be telling the ‘business sector’ is this: if you can’t afford semi-Third World wage levels like HK$12,000pm – even after de facto taxpayer subsidies in the form of public housing/healthcare/schools/travel for the low-paid – you should change your business model and innovate, or just shut down your crappy, miserable little company and relocate in Vietnam or somewhere.
Even more weirdly, he warns that such a healthy demand for labour – plainly associated with our low levels of unemployment – could lead to joblessness and poverty…
Tsang warned that in the end, businesses that cannot survive the increasing labour costs and adverse economic environment might collapse, which would lead to higher unemployment and reduce spending power.
So, by his logic, Hong Kong would be better off sticking with higher unemployment and lower incomes and general economic weakness, to avoid all this scary, destabilizing poor-getting-a-bit-richer stuff.
(We’re leaving aside the fact that for many enterprises, the crippling business cost is rents – which Hong Kong administrations work hard to inflate by keeping land in short supply and swamping the city with unmanageable numbers of Mainland shoppers. It would be interesting to know whether the gargantuan fortunes now earned by dishwashers in Hong Kong are related to this influx; it would be the first real example that our ‘tourism’ plague has, like the Black Death in the 1350s, actually ‘trickled down’ in some way, in which case Tsang and the ‘business sector’ should be wetting themselves with excitement about it.)
Many observers (see the SCMP online comments) will see John Tsang’s remarks as proof that the man is evil or just dimwitted. Grasping for an alternative explanation in a spirit of charity, I might suggest that he is fearful that he could be called upon to be Chief Executive, and calculates that making such absurd and predictably unpopular, inevitably disparaged statements will help avert this fate worse than death. Go down in history as a total idiot – avoid being CE. Wouldn’t you? Small price to pay. Expect him to be caught with a huge illegal structure attached to his home next.