Over 300,000 workers to get significant salary increase

The city's new minimum wage finally has been released. The HK$28/hour base is roughly the cost of two cartons of milk, a fast food meal or four premium beers.

Secretary for Labor and Welfare Matthew Cheung Kin-chung said the new wage, set to come into effect May 1 if it passes the legislature, represented an average wage increase of 16.9 percent affecting some 314,600 employees. The cost will be roughly HK$3.3 billion.

Tabled for discussion at the Legislative Council Wednesday, the new wage was a milestone in the protection of the rights of low-income workers and a hard-won achievement given the controversy amid the city's laissez faire system, Chief Executive Donald Tsang said.

To offset the impact on the labor market, the Labor Department will improve employment services for the young, middle-aged and those with disabilities, he added.

By the Minimum Wage Commission's estimates, the new minimum wage amounts to 48 percent of Hong Kong's median hourly wage during the second quarter of 2009.

More than half (61.4 percent) of the more than 314,000 workers expected to benefit from the new minimum wage are women. A quarter of those who will benefit are over the age of 65 and 18 percent work in a part-time capacity, Cheung said.

On a sector basis, 35.5 percent of workers are from security and cleaning companies while 19 percent work in restaurants and 16 percent in retail.

Cheung said the impact on employment will be relatively mild, "especially when viewed against the improving economic and labor market conditions".

Shying away from commenting on concerns that employers would start cutting back on employee benefits to offset increases in costs due to the new wage, Cheung urged employers to "communicate closely with their employees, particularly to have frank discussions [and to] work together".

Unionist lawmaker Lee Cheuk-yan said he was disappointed with the rate saying it will be based on figures two years old before its implementation, adding HK$28 an hour was not enough to provide for a family. He favored the HK$33 an hour rate supported by employee groups.

Commission chairwoman Teresa Cheng Yeuk-wah said the commission does not think a HK$33 hourly rate was sustainable. She noted, half the burden would eat into company profits while the number of companies falling into the red would go up by 60 percent. She added those companies employed 120,000 workers.

Catering lawmaker Tommy Cheung Yu-yan said the new wage would be difficult for smaller operators to bear, calling for government relief such as the waiver of licenses fees for one year and subsidies.

China Daily

(HK Edition 11/11/2010 page1)