Hong Kong minimum wage to be raised to HK$40 after a four-year freeze

Hong Kong’s working class will see a rise in the minimum wage to HK$40 after four years, according to a source close to the government, with a 6.7% hike in rate.

Statistics from the Census and Statistics Department show that the move to increase HK$2.5 would benefit nearly 73,300 workers – equivalent to 2.6 percent of Hong Kong’s workforce.

Miss. Lai, a 17-year-old student from Tam Pak Yu College, welcomes such changes while being doubtful about the effectiveness of increasing HK$2.5 per hour.

“The grassroots rely heavily on the minimum wage because they are incapable of getting some monthly-paid jobs,” said Lai. “The growth can only increase their monthly incomes for a few hundred Hong Kong dollars, which may not be enough for catching up with the inflationary pressures.”

Miss. Lai, a 17-year-old student from Tam Pak Yu College, is doubtful about the effectiveness of the rise.  (Photo Credit: Katie Lau).

According to The Federation of Hong Kong and Kowloon Labour Unions (HKFLU), there are currently 14,300 people earning the minimum wage. They mainly work in property management, retail, and catering industries, and have occupied 0.5% of Hong Kong’s labor market.

Chiu Kwong Cheung, a 61-year-old street cleaner working for City Cleaning Services Limited for eight months, is also one of the workers earning the minimum wage and suffering from working poverty with low income.

“The increase in hourly pay is useless for me…I could not even buy a Fujian Fried Rice with it,” said Chiu. “The growth is just pushing up the commodity price, and we have to pay back for these price hikes in the end.”

Chiu Kwong Cheung, a 61-year-old street cleaner, thinks that the HK$2.5 increase doesn’t help much in improving his life (Photo Credit: Katie Lau).

The minimum wage was introduced in 2011 to protect low-income employees. It was initially set at HK$28 and gradually raised to the current amount in 2019. The amount is reviewed by the Minimum Wage Committee biennially, and this year, the new rate is expected to effect next May if the Executive Council approves with the commission.

Having said that, grey areas are still observed in Hong Kong’s labour welfare system. The working class in Hong Kong is not comprehensively protected, while the pandemic has further fuelled a drive to worsen their lives. The minimum wage seems to be a tool for providing a basic subsistence, but there is actually room for improvement.

Meals from chain restaurants are mostly over HK$40, which has demonstrated serious inflation in Hong Kong. Yau Oi Estate, 18th October, 2022. (Photo Credit: Katie Lau).

Tuen Mun District Councillor Leung Ho-Man supported the view of reviewing the minimum wage annually while believing that the government should not be penny-pinching regarding the welfare for Hong Kong’s working class.

“Biennial review is unable to reflect on a current economic level, in which there is a data lag for such approach…in contrast, an annual review will be more in line with our social needs,” said Leung.

“There is a necessity to raise the bar of applying social welfare subvention and build a stronger social safety net, which may be more effective than simply raising the minimum wage in the long run.”

(Featured Photo: Jimmy Chan/ Pexels.com)

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