Hong Kong passed a minimum wage law yesterday, a rare departure from the wealthy Chinese financial hub's free-market philosophy that union leaders hailed as a victory for the territory's underpaid working class.
Hong Kong legislator and union organizer Lee Cheuk-yan (李卓人) called the vote a historic moment requiring the Hong Kong government to set a minimum wage for the first time in the city's history.
“This symbolizes that Hong Kong has said goodbye to shameful wages and embraced social justice for workers. This means goodbye to unfettered capitalism,” Lee said.
However, the law does not cover the nearly 280,000 mostly Filipino and Indonesian domestic workers who work as live-in help for Hong Kong families. They are currently promised a monthly minimum wage of HK$3,580 (US$450).
China decided to preserve Hong Kong's capitalist system when Britain returned the territory in 1997. The Beijing-appointed government continued to resist a minimum wage in the name of keeping labor markets free.
Under pressure to address the city’s widening rich-poor gap after a voluntary wage protection initiative failed, Hong Kong Chief Executive Donald Tsang (曾蔭權) in 2008 reversed government policy and started efforts to introduce a minimum wage, culminating in yesterday's law.
Although Lee praised the law backed by pro-business legislators, he said it was highly limited, leaving much discretion in the hands of the territory's chief executive, who is traditionally allied with the business community.
The Hong Kong chief executive is empowered to recommend a minimum wage level, which the legislature can approve or reject but can't amend.
Once the level is set, the law requires the wage level to be reviewed every two years — instead of the annual review demanded by unionists.
The Hong Kong administration excluded the nearly 280,000 mostly Filipino and Indonesian domestic workers on the grounds that it is difficult to calculate their work hours given the round-the-clock nature of their jobs, also noting that they are promised benefits like housing, food, medical care and free travel to their home countries.
Any minimum wage law “must balance the interests of every party,” Hong Kong Secretary for Labor and Welfare Matthew Cheung (張建宗) told legislators yesterday.
Tsang will propose the first minimum wage level in November, Cheung said. The current consensus ranges from the HK$24 (US$3) an hour backed by business interests to the HK$33 (US$4) demanded by local unions — about the average price of a fast-food meal and still low in one of the most expensive cities in the world.
The minimum wage in the US is US$7.25; in Britain, it's £5.80 (US$9); in Canada, it ranges from C$8 to C$10.25 (US$7.60 to US$9.70) depending on province; in New Zealand, it is NZ$12.75 (US$9).
Hong Kong is one of the world's richest territories with a 2008 per capita GDP of US$30,863, but is also among the most stratified economies. It came last in income equality among 38 countries and territories in last year's UN Development Programme’s Human Development Report.
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