Editorial | Minimum wage rises must not leave behind Hong Kong’s most vulnerable
As the economic pie grows, money-making companies can afford to do more so employees who are struggling get their fair share of return
Living on the minimum wage can be challenging in a city known for its notoriously high cost of living. Even though the statutory wage floor is meant to be a safety net for the lowest paid workers, many of them still face financial hardship, so much so that they may have to scale back on food and other expenses or work multiple jobs to survive. Their plight is often not appreciated by people who are well above the breadline.
This is the second adjustment under an enhanced formula that links wages for the working poor with inflation and economic growth. The figure has taken into account last year’s 1.9 per cent rise in the consumer price index and the 3.5 per cent real growth in gross domestic product, as well as the 1.2 per cent trend economic growth in the past decade. The Minimum Wage Commission believes that the new rate can maintain an appropriate balance between forestalling excessively low wages and minimising the loss of low-paid jobs, while giving due regard to sustaining economic growth and competitiveness.
The relatively mild reaction from employers shows the wage rise does not come as too heavy a burden. It is estimated that only about 18,800 to 39,400 workers are earning less than the new rate, representing no more than 1.4 per cent of all employees in Hong Kong. The actual number of beneficiaries, however, is likely to be greater as companies are expected to adjust wages of those at higher levels. Taking into account the knock-on effect, the additional wage bill will be about HK$110 million to HK$260 million, or up to 0.03 per cent of the total wage bills, according to the commission.
As the economic pie continues to grow, money-making companies can afford to do more so that employees, especially those struggling at the bottom, will get their fair share of return.