New minimum wage, HK$30 an hr, to take effect in May: Commission

The adjusted minimum wage rate, scheduled to take effect in May, 2013 will be HK$30 an hour, an increase of HK$2 an hour.

The decision by the Minimum Wage Commission (MWC), announced on Tuesday, following months of bitter debate, involving the opposing views of business and organized labor.

"The MWC has reached consensus on the recommended SMW (statutory minimum wage) rate after considering prudently and conducting detailed analysis and assessment on the basis of relevant statistical data and information, as well as views of members of the public and stakeholders," said a spokesman.

Sources from the 13-member commission revealed earlier that employers were most reluctant for the wage level to nudge above HK$30 while labor unions demanded the wage floor to be increased to HK$33 at least. Kwong Chi-kin, a member of the committee, said members agreed the new rate should fall between HK$29 and HK$31 per hour. Chairman Jat Sew-tong suggested the rate should be set in the middle, at HK$30.

Terence Chong Tai-Leung, executive director of the Institute of Global Economics and Finance, said the new wage floor is acceptable because it has taken account of inflation.

Lawmaker Tommy Cheung Yu-yan representing the catering industry said he's more concerned about the ripple effect caused by the increase, with many restaurants already paying more than HK$30 an hour to hire dish washers.

He said it's too early to estimate whether the restaurants will be able to sustain a 4-5 percent increase in their expenditures and hard to predict whether it will trigger restaurant closures.

Concurring with Cheung, Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades, said employers had no choice but to accept MWC's suggestion. He expected the salary increase will add 3 percent to the operations costs of restaurants and believed it will inevitably put pressure on the catering industry.

While the employers are unhappy about the decision, labor representatives are even more disappointed. The Hong Kong Catholic Commission For Labour Affairs had advocated a HK$35-an-hour baseline for grassroots workers.

Its policy research officer Law Pui-shan said she was disappointed that labor had "lost its battle" for a minimum wage, claiming HK$30 an hour is simply "a thing of little value" which is all but impossible to accept, but there is no mechanism of appeal on behalf of workers.

After the commission submits its report, the government will table it in the Legislative Council. But legislators can only accept or reject the rate. They are not empowered to raise or lower the recommended wage minimum. "How is it possible for workers earning only HK$28 an hour to enjoy a basic life, as a lunch box cost at any fast food shop costs more than HK$30?" she asked.

Acknowledging labor unions had diverse views on the salary floor - with requests between HK$33 and HK$35 - Law remarked that the commission should appoint more labor representatives to express their views in future closed-door meetings.

Vice-chairman of the Hong Kong Federation of Trade Unions Ken Tong Kang-yiu said the suggested minimum wage shows compromise between both sides, allowing the rate to catch up with inflation. He pledged the union will keep fighting for more benefits for workers.

Speaking to the media on Tuesday, Chief Executive Leung Chun-ying (CE) said he will consider various factors, including the long-term interests of Hong Kong and the views of both employers and employees, before deciding whether to adjust the minimum wage. The CE is expected to receive a report from the MWC at the end of next month.

The change is expected to benefit 330,000 unskilled and semi-skilled workers - 30 percent of whom are cleaning workers and security guards.

mingyeung@chinadailyhk.com

(HK Edition 09/26/2012 page1)