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Tuesday, Jun 02, 2020

Hong Kong employers push for minimum wage freeze amid economy battered by Covid-19

Union leaders and low-income workers alike argue struggling economy will have rebounded by time any increase takes effect. Former security guard says employers who cut pay during 2003 Sars outbreak took years to return wages to original level

Hong Kong’s minimum wage earners could become the latest victims of the coronavirus pandemic, with the business sector demanding authorities freeze the current minimum wage of HK$37.5 (US$4.8) per hour following a biyearly review.

With Covid-19 driving the city’s economy to its worst performance on record, slumping 8.9 per cent year on year in the first quarter, business leaders said now was not the time for the minimum wage level to be adjusted.

But that line of reasoning has angered labour unionists and low-income workers, who said the wage should increase to about HK$44 an hour, as the economy will have recovered by the time the increase would take effect next year.

“Many businesses have been hard hit in the past few months and they have been losing money. They can’t afford to offer a raise. Some have even had to sack some of their staff,” said Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades.

“We need to look at everything rationally.”

He called for the level to remain at the current HK$37.50.

Last month, the Minimum Wage Commission launched an eight-week public consultation to review the statutory minimum wage. It said it would maintain an “appropriate balance” between avoiding excessively low wages, minimising the loss of low-paid jobs, and sustaining the city’s economic growth and competitiveness.

A minimum wage of HK$28 first came into force in 2011. It rose to HK$30 in 2013, HK$32.50 in 2015, HK$34.50 in 2017 and HK$37.50 last year.

The law requires the hourly wage to be reviewed at least once every two years. While the commission is expected to submit a report to the chief executive by the end of October, the new increase – if there is going to be one – would not take effect before May next year.

Wong said about 1,000 of the city’s 16,000 or so restaurants have suspended business or shut completely during the Covid-19 pandemic, and that any increase to the minimum wage level would only add extra pressure to struggling businesses.

Bosses might have no choice but to fire some employees, he added.

According to the latest official data, only 0.7 per cent of the city’s workforce, or 21,200 people, were making HK$37.50 an hour as of mid-2019, about half of them being security guards and cleaners.

But employers have for years warned of a “butterfly effect”, suggesting those making more than minimum wage would ask for a raise once the statutory wage level is revised upward.

Simon Wong Kit-lung, president of the Institution of Dining Art, a catering group, also suggested that the level remain frozen, describing it as a “rational” decision.

“Employers don’t mind offering their staff a raise when business is good. But this is not the case now,” said Wong, himself once a member of the Minimum Wage Commission.

Yu Mei-wan, 64, used to make minimum wage as a security guard. Last month, she took a new job checking office workers’ temperatures for HK$12,000 a month. She was among those who believed the level should go up to HK$44 an hour.

“During the Sars outbreak of 2003, many employers asked employees to help them get through the difficult times and cut their pay. The employers have barely adjusted their pay back to the normal level over the years,” she said, referring to the severe acute respiratory syndrome epidemic that killed 299 people in Hong Kong.

She said by the time the level was revised next year, the economy would probably have already recovered.

Carol Ng Man-yee, chairwoman of the Confederation of Trade Unions, also called for HK$44 an hour.

“Many of the 20,000 or so people making the minimum wage now are security guards and cleaners who have to meet many people every day amid the outbreak. I can’t believe employers are saying they cannot afford to pay them a little more,” she said.

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