Hong Kong minimum wage takes effect

DIFFERING OPINIONS::Critics of the law said the amount is still too low for workers to earn a living , while the business community has warned of widespread job losses


Mon, May 02, 2011 - Page 11

Hong Kong’s first minimum wage came into effect yesterday amid rising public anger over sky-high rents and a growing income gap in the international financial hub.

The controversial pay floor, which divided business and labor groups for years, requires employers to pay staff at least HK$28 (US$3.60) an hour.

Critics have said the figure is still too low for many low-income people struggling to make ends meet. However, business groups have warned that the new law would lead to widespread job losses.

The territory is famous for its stunningly wealthy tycoons whose business empires span all sectors of Hong Kong’s economy and the world. However, it is also home to hundreds of thousands of workers who live on hourly wages sometimes as low as US$2 an hour.

The government has previously said more than 300,000 workers were likely to see their pay rise as a result of the new legislation.

On Saturday, hundreds of workers marched in the streets, claiming some employers had changed staff contracts to cut benefits, such as paid rest days, ahead of the new law, radio RTHK reported.

In an editorial, the Sunday Morning Post described the new wage floor as a “step in the right direction.”

“There’s no better time for the legislation to take effect,” the Post said. “Anxiety is high about the wealth gap and social equity. The government is under fire, accused of colluding with big business at the expense of the poor.”

“It’s these people, on the bottom rung of the social ladder, who will benefit most from the minimum wage,” the editorial said.

Hong Kong’s labor boss acknowledged that “teething problems are inevitable in launching a major -initiative of such magnitude.”

“We are entering uncharted waters in Hong Kong’s social development,” Hong Kong Secretary for Labour and Welfare Matthew Cheung (張建宗) said in a statement.

In January, Hong Kong lawmakers gave final approval for the new minimum wage, well below the level found elsewhere in the developed world, with union Legislator Lee Cheuk-yan (李卓人) describing it at the time as “a victory with regrets.”