Two Hong Kong government advisers have urged members of the Minimum Wage Commission to return to the negotiating table to avoid a complete salary freeze for low-pay workers.
They made the call after sources confirmed the commission on Thursday had failed to reach a consensus on a new minimum wage level at its second meeting, the first time that had happened since the index was introduced in 2011. The current minimum wage is HK$37.50 (US$4.80) an hour.
With Hong Kong’s economy battered by the Covid-19 pandemic, commission members from labour groups and the business sector were at odds over the minimum wage review, with both sides arguing it was they who had to bear the brunt of the downturn.
Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.
A review of the minimum wage, which started at HK$28 in 2011, is carried out every two years.
During a Legislative Council Finance Committee meeting on Friday, Secretary for Labour and Welfare Law Chi-Kwong said the wage review had not yet been completed, and the report would be submitted to the government next month.
“At this stage, it is inappropriate for the authorities to comment,” he added.
I think the best thing is for the committee to take some more time and reach a consensus
Ronny Tong, executive council member
While commission members from the labour side called for the minimum wage to be increased to at least HK$39, business sector representatives insisted it stay at HK$37.50 or be raised to just HK$38, according to sources with knowledge of the closed-door talks.
“Representatives from the labour sector believed that low-paid workers were facing wage cuts, a wage freeze and even unpaid leave under the pandemic, thus some strived to increase the level to no less than HK$42,” a source said. “But many from the business sector, and some academics, said industries – such as catering and retail – had been hard hit since the social unrest last year.”
The commission is expected to submit a report next month to Chief Executive Carrie Lam Cheng Yuet-ngor. But members of her de facto cabinet, the Executive Council. believed there was still time to reach a consensus and it could be done through convening another meeting.
“It is not a surprise that they have divergent views, but I think the best thing is for the committee to take some more time and reach a consensus,” said executive councillor Ronny Tong Ka-wah. “Otherwise, if the majority rules, it might mean a frozen salary this year.”
Fellow Exco member Ip Kwok-him said he was disappointed the committee had not reached a consensus.
“We all know the city’s financial situation is difficult, and the business sectors might have their reasons, but I hope both sides will not go to an extreme,” Ip said. “They should sit down and discuss again, and try to reach a middle point.”
The labour sector should worry about unemployment instead of salary
Regina Ip, executive councillor
But executive councillor and New People's Party lawmaker Regina Ip Lau Suk-yee believed it was understandable if there was no increase in the minimum wage this year.
“Many corporations may fail by the end of the year when the government ends its wage subsidy scheme. The labour sector should worry about unemployment instead of salary,” she said.
“When you cannot get hold of a job, what’s the point of talking about a minimum wage? This is unrealistic.”
Official data showed that between May and June last year, about 21,200 people in Hong Kong had been receiving the minimum wage of HK$37.50 per hour. More than half, or about 11,400, were working for property management companies, or as security personnel or cleaning workers.
The city’s three big labour groups – the Federation of Hong Kong and Kowloon Labour Unions, the Federation of Trade Unions, and the Confederation of Trade Unions (CTU) – all opposed a wage freeze.
These workers, including cleaners, have contributed a lot to the pandemic. Their wages should not be frozen
Carol Ng, chairwoman, Confederation of Trade Unions
CTU chairwoman Carol Ng Man-yee said: “There are not many workers who receive minimum wages, and these workers, including cleaners, have contributed a lot during the pandemic. Their wages should not be frozen.”
But textiles and garment sector lawmaker Felix Chung Kwok-pan welcomed the idea of keeping the pay rate unchanged, adding that industry bosses could not bear any salary increase.
Danny Lau Tat-pong, honorary chairman of the Hong Kong Small and Medium Enterprises Association, was worried a wage increase would have a ripple effect.
“If the minimum wage is raised, other employees may also ask for a salary increase, which will eventually increase employers’ burden,” he said.
More from South China Morning Post:
- Hong Kong employers push for minimum wage freeze amid economy battered by Covid-19
- No consensus on Hong Kong minimum wage for first time ever, sources say on commission meeting