Hong Kong sets controversial minimum wage

HONG KONG – Hong Kong on Wednesday set the city’s first minimum wage at 3.60 US dollars an hour, prompting anger from labour groups which criticised the amount as unreasonable amid a growing income gap.

The government is aiming to usher in a base wage of 28 Hong Kong dollars (US$3.60) from May next year – lower than the 33 Hong Kong dollars which labour activists have been demanding.

The controversial issue has divided business and labour groups for more than a decade, with business groups warning it would lead to widespread job losses among poor workers.

Concern about Hong Kong’s growing income gap – which the UN Development Programme last year pegged as the world’s biggest among wealthy economies – prompted the government to introduce a wage floor.

The city’s labour department said the new wage would benefit almost 315,000 workers in the southern Chinese city, boosting their pay by 16.9 per cent on average.

“This is a new and noble thing for Hong Kong,” Matthew Cheung, secretary for labour and welfare, told a news conference.

“I appreciate it will take time for the community to adjust to it. The aim is to protect grassroot workers in Hong Kong – employees are the most valuable asset to enterprises,” he added.

A bill will be tabled to Hong Kong’s legislature next week for official endorsement. The law was passed in July, but Wednesday’s announcement was the first time officials unveiled the new wage figure.

Lee Cheuk-yan, a unionist legislator and secretary of the Confederation of Trade Unions, criticised the pay floor as “unreasonable”.

“We want the government to review this minimum wage as soon as possible so it will represent a fairer wage,” Lee said, according to local Cable TV.

Unions have warned that anything less than 33 Hong Kong dollars an hour would fail to cover basic living expenses, which have been rising sharply.

Many countries already have minimum wage legislation in place, with hourly rates in New York and London set between 7.25 and 8.80 US dollars.

But Teresa Cheng, chairwoman of the government committee tasked to fix the minimum wage, said a 33 Hong Kong dollar wage would hurt many small-to-medium sized enterprises.

“We have to balance the interest of workers and ensure businesses can continue to operate,” she told the news conference.

– AFP/al