The minimum wage is going up in Hong Kong, and nobody is happy.
Employees are upset that an increase from HK$28 to $30 in the minimum wage is paltry. That’s the equivalent to a 25 cent American rise.
Bosses claim the increase in minimum wage means they can afford fewer employees and the shocking rise will hurt their businesses. They also claim it will contribute to price rises in food and building management fees.
Unions are angry because they feel they’ve let their constituencies down. The rise will do little to alleviate poverty.
Manufacturers in China re unhappy, because a recent rise in minimum wage in Shenzhen to RMB13.3 and Beijing to RMB14 make their goods more expensive. To better understand, a factory worker in Shenzhen is paid the equivalent of US$2.11 per hour. That is what USA workers received in 1974 – nearly 40 years ago.
The rise is the recommendation of the Minimum Wage Commission which will submit a report and recommendations to Hong Kong’s Legislative Council for approval. If voted into law the increase will take effect from May 2013.
Meanwhile the 7.1 per cent increase will be whittled away by annual inflation running at 3.7 per cent today. Adjusted for inflation the rise will amount to no more than HK$1 an hour – or 12 US cents (whatever happened to the cents symbol on the typewriter?)
To gain an understanding of how Hong Kong sits against international standards, look at this table comparing the minimum wage across 197 countries on Wikipedia.
In Hong Kong the high cost of living and the extreme differences between the wealthy and the poor make standards like minimum wage all the more important. This alone provides some certainty to those employed but still living at poverty levels.
To understand life on minimum wage, columnist and activist Barbara Ehrenreich spent one year working at jobs that only paid the USA minimum wage. Her novel “Nickel and Dimed” is a harrowing account of full-time work and living in poverty. For her encore, should she try living in Hong Kong earning HK$30 per hour? That’s US$3.87 per hour.