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Hong Kong
OpinionComment
Kalina Tsang
Kalina Tsang

Opinion | Hong Kong’s new minimum wage still fails the working poor as wealth gap widens

  • At HK$40 per hour, it’s below the welfare payment needed for a family of two to survive, and demotivating when the city’s richest earn over 47 times more
  • The minimum wage must catch up with inflation and do better than welfare payments in allowing workers to support a dependent

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A woman collects cardboard in Mong Kok on January 10. For many low-wage earners, life was already difficult before Covid-19 exacerbated the situation. Photo: Jelly Tse
Kalina Tsang
After a four-year freeze, the minimum wage will finally increase in May, to HK$40 (US$5) per hour, up by a mere HK$2.50. When this was first announced, we criticised it as unacceptable because it was lower than what a family of two would receive through the Comprehensive Social Security Assistance (CSSA) scheme.
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In response to the criticism, Secretary for Labour and Welfare Chris Sun Yuk-han said the CSSA scheme served as a safety net and should not be compared with the minimum wage. Many people work not simply because of the money, he added, but also because it’s important for their mental and physical health. He said many people in Hong Kong have strength of character because they would rather work than be on welfare.

Sun’s remarks about people wanting to pull themselves up by their bootstraps seem an attempt to justify how low the minimum wage is, and also negatively label families who need to turn to the CSSA. But society shouldn’t be encouraged to believe that taking up a low-paying job or even being exploited is praiseworthy.

For many people, the primary goal of work is to earn enough money to support themselves and their family. According to the Minimum Wage Commission in Hong Kong, the purpose of establishing the minimum wage is to strike “an appropriate balance between the objectives of forestalling excessively low wages and minimising the loss of low-paid jobs”, while also sustaining “economic growth and competitiveness”.

But since the minimum wage was introduced in 2011, greater emphasis has been placed on the economic environment. The commission has failed to prevent wages from being too low.
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Also, over time, fewer people are benefiting from the minimum wage. In 2011, when it was set at HK$28 per hour, 6.4 per cent of employees (about 180,000 people) benefited. But, according to the Census and Statistics Department, by 2021, only 2.6 per cent of employees (about 73,300 people) earned less than HK$40 per hour, and only 0.5 per cent of all employees (about 14,000 people) earned the minimum wage of HK$37.50.

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