....... Divertimento: Minimum wage

Friday, 10 June 2011

Minimum wage

Last night I read an article about parental leave in Australia. In the article, the writer mentions that the stautory minimum wage in Australia is A$570 per week (i.e. approximately $4,500 per week or $18,000 per month). This is rather generous by Hong Kong standards. And so, it got me thinking about Hong Kong’s minimum wage. Foreign domestic helpers have had a statutory minimum wage for a long time. Currently, it is $3,740 per month. For the others, a statutory minimum wage of $28 per working hour came into effect on 1 May 2011.

There’s been a lot of controversy over the setting of a minimum wage for workers in Hong Kong. Critics include the business sectors on the basis that it is too costly and would force smaller businesses to lay off staff. Critics also say that it is a departure from Hong Kong laissez-faire economy. Employers preferred the minimum wage to be set at $24 per hour. Unions had campaigned for a minimum wage of $33 per hour.

After much debate the minimum wage was set at $28 an hour. However the legislation is silent on a number of areas such as whether meal times and holidays are paid work hours. This flexibility has led some employers to re-hire existing employees on new contracts excluding meal times and holidays to avoid paying more. It has been estimated that the legislation will benefit up to 300,000 workers such as street cleaners, security guards and restaurant workers. It would be interesting to see how many would actually ended up better off.

Just so you know, the statutory minimum wage in a few countries most Hong Kong people are familiar with is:

Taiwan – NT$98 per hour ($26.60)
USA – US$7.25 per hour ($56.40)
Japan – varies across prefectures, ¥642-¥821 per hour($62.30 - $176.70)
U.K. - £5.93 per hour ($75.90)
Singapore, Malaysia – no statutory minimum

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