HongKong Views

Employers apply scare tactics on minimum wage

By Hong Liang (HK Edition)
Updated: 2010-07-16 07:44
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 Employers apply scare tactics on minimum wage

Protestors demanding a minimum wage demonstrate outside the Legislative Council in Hong Kong on Wednesday. Labor groups have pushed for the minimum wage to be fixed at HK$33 an hour. Mike Clarke / AFP

Hong Kong has finally become civilized enough to introduce a minimum wage bill. But the Scrooges among employers are taking a last stand in the battle to set the minimum wage level.

Labor has put forward an hourly rate of not less than HK$33, which is substantially lower than the average workers' pay of HK$56 an hour. Arguing that such a "high" minimum wage level would not be "sustainable," businesses countered with a proposal of HK$22.

The owner of a large restaurant chain reportedly said that he'd have to lay off workers if labor has its way when the minimum wage level finally is set. Workers at his restaurants earn an average HK$19 an hour, according to local reports. Chan's threat is seen to carry considerable weight not only because of the large number of people employed at his restaurants, but also for the fact that he sits on the 12-member Provisional Minimum Wage Commission, which advises the chief executive on the matter.

Employers apply scare tactics on minimum wage

The government, which is to decide on the minimum wage level later this year, is keeping its cards close to its chest. It merely pointed out that there was a need for a balanced approach to the issue. Such a statement has raised widespread worries that the government will make a compromise decision that will embitter labor, disappoint the public and bring little joy to employers.

It is important to bear in mind that the development of an economy, especially a service-oriented one like that of Hong Kong, cannot be sustainable if it is built on cheap labor. We have heard many times the tiresome argument that wages should be determined by supply and demand. This is 19th century capitalist thinking. Since then, we have learned that markets are seldom perfect and the social cost of allowing market forces to run free is usually too high to bear.

For that reason, the government of a civilized society has the duty to blunt the impact of brutal market forces on those workers with the least amount of bargaining power. Enforcing a minimum wage set at a realistic level is one of the few tools available to the Hong Kong government for adjusting the wealth distribution mechanism which has obviously gone out of whack in recent years.

With social stability threatened by the rapidly widening wealth gap, the government must try to win the confidence of the public by taking a highly visible and firmly uncompromising stand on the side of the half a million or so workers at the bottom rung of the wage scale. The government has already allowed the political aura of initiating the minimum wage bill to be hijacked by a few activist politicians who are well-known to be long on theatrics and short on substance. It can no longer afford to be seen to be weak and indecisive in setting a minimum wage level that is below public expectations.

It is time for the government and the public to call the employers' bluff: Make my day.

(HK Edition 07/16/2010 page2)