At a time of growing income inequality and spiking inflation, many low-income households in Hong Kong are struggling every day to sustain a decent standard of living with minimum wage. The meager amount of money these workers have been able to stretch can no longer cover the rising cost of living, spanning everything from housing and healthcare to childcare and food.

According to Oxfam Hong Kong (OHK)’s 2022 Hong Kong Living Wage Study, there were around 860,000 workers in Hong Kong who earned less than the living wage, accounting for more than 30% of the total workforce. The median hourly wage of the lowest-pay industries trailed at $55 (retail and catering) and $48.7 (property management, security and cleaning) against the overall median hourly wage of $77.4.

Addressing this dire situation, OHK officially launched the Living Wage Charter on April 27, 2023, calling for even more companies in the city to raise the minimum wage to a living wage, in hopes of alleviating the problem of working poverty and narrowing the gap between the rich and poor to create a fairer society.

What is a living wage?

OHK first put forth the concept of living wage in Hong Kong in 2018, after publishing the pioneering research that calculates the city’s living wage with the Anker Living Wage Method. Unlike the legally mandated minimum wage – the main purpose of which is to balance between making sure workers are not pushed into extreme poverty, and minimising the loss of low-income jobs – the living wage is updated every year by gauging workers’ needs holistically.

As defined by the globally recognized Anker Living Wage Method, a living wage is a salary that is adequate enough for them and their families to live in dignity; that they are able to afford food, housing and other essential needs, including provisions for unexpected happenings. In 2023, the living hourly wage for each adult, as proposed by OHK, would be no less than HK$60.1.

“The minimum wage looks at wages from an economic standpoint, but the living wage takes a much more people-centred perspective,” Kalina Tsang, Director General of Oxfam Hong Kong, said in the opening remarks for The Living Wage Charter Official Launch.

A win-win situation

The last three years of pandemic have only exacerbated the salary gap in Hong Kong. While the minimum hourly wage has been frozen for the past four years (which has been raised to $40 beginning 1 May, 2023), many employers are finding it hard to hire and retain staff due to labour shortage.

“It’s fair to say that COVID-19 has impacted Hong Kong’s labor market significantly. If wages cannot cover the basic cost of living, it will deter potential workers from joining the workforce and accentuate the labor shortage, creating a vicious cycle,” Tsang explained.

Raising the minimum wage to living wage is not only the right thing to do ethically, it also does good for the economy. “As well as incentivizing potential workers to join the workforce again and improving their livelihoods, employers can also recruit and retain talent more easily, given that employees would likely be more committed to their jobs,” Tsang noted.

OHK has spared no efforts in reaching out to employers in both the public and private sectors since publishing the 2018 research, propagating the concept of responsible pay and encouraging them to pay their staff a living wage. After several rounds of discussion, the HKSAR government has decided to increase the salary of their outsourced cleaners – one of the lowest-paid groups – by nearly 50 per cent, marking a major step toward paying a living wage.

Many corporations in the private sector are also stepping up. Companies including Burberry, KPMG, Fresh Accounting, Asia Pacific Soccer Schools, The Hong Kong University of Science and Technology, and Fortune Pharmacal have signed up for OHK’s Living Wage Charter.

Making a difference

Among these Living Wage employers, global law firm Linklaters LLP, headquartered in London and with branch offices in Hong Kong, has been leading by example. Matt Sparkes, Sustainability Director at Linklaters LLP and Vice-chair of the Living Wage Foundation, said there are many lessons to draw from the UK’s remarkably successful Living Wage movement, what with its continually growing scope, engagement and scale. “The UK now sees over 12,000 employers taking up the living wage accreditation, which has put £2 billion back into the pockets of 450,000 low-paid workers since 2002,” he explained.

“We are a successful global business so it is hard to justify not sharing that success with those who make it happen,” Sparkes added. “It’s not just about how people survive, it’s their dignity. And even though living wage is voluntarily paid, companies can demonstrate their commitment to people early by joining the Living Wage Charter.”

Linklaters LLP has paid a living wage to all of its staff in the UK starting from 2010, including both directly and indirectly employed. Greater loyalty, higher flexibility and reduced turnover of frontline staff are amongst the major benefits the company witnesses.

“Living wage matters because it meets people where they are and supports those who keep our firm running,” said Sparkes, who agreed with Tsang in that living wage serves as a remedy to the workforce dilemma. “It helps in narrowing the wealth gap, and as workers spend the money locally, it also enables the economy to thrive.”

“With one in six people across the UK earning less than the real living wage, we are proud to have provided support to our staff and the movement. We hope that more businesses will be joining us too. There is no doubt the momentum is powering ahead.”

More information:

The Living Wage Charter can be found on OHK’s

Website: https://bit.ly/LivingWageCharter

If employers are interested in supporting the Living Wage Charter, they can contact Ms. Celine Chan at livingwage@oxfam.org.hk   or (852) 3120 5292.

Living Wage Charter

Video about the living wage