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Hong Kong considers minimum wage
Hong Kong is again considering introducing a minimum wage, with draft legislation slated for debate later in the year. The SAR last debated the issue in 1999, when it was turned down. The prospect is looking likely.
According to Lok-sang Ho, professor of economics, Lingnan University, there is strong opposition against the concept from the business community. He said: “A number of free market economists have expressed objections against it on the grounds that it is counter to the philosophy of laissez-faire which Hong Kong has followed for many, many years and has so far produced very impressive results.”
However, the International Labour Organisation (ILO) says Hong Kong has one of the highest rates of inequality in the world. In a city where the 40 richest people are worth at least a billion dollars each, 150,000 people live on less than 13 dollars a day. A 2007 ILO report on workers' rights in Hong Kong noted that the main cause of poverty there was not unemployment but low wages.
Professor Ho is in favour of a minimum wage and wage subsidy scheme, which would benefit those most likely to earn low wages, such as people with disabilities and low-skilled. By targeting lower-end wage earners, Professor Ho argues more money would be left in the pockets of more potential consumers, driving business and creating a more inviting environment for investors.
Two years ago the Wage Protection Movement was introduced - a suggested minimum wage for security guards and cleaners. However, it was voluntary for employers, and Professor Ho said it was a failure because there is “little incentive for people to follow that.”
Draft legislation is due to be debated again later this year and some legislators are publicly pushing for a minimum wage of about four US dollars an hour to be introduced. Professor Ho believes that ten years after the last vote the Hong Kong legislature could prove more open to the idea. He said: “I think there is a good chance, because at least two members of the Executive Council, including the Convenor, have expressed support for it.”
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