Saturday March 20 2010
Minimum wage formula 'won't work for HK'
Martin Wong and Paggie Leung
Hong Kong's vast income gap means it cannot apply a simple formula commonly usedelsewhere when setting its first minimum wage, an academic says.
The debate on pegging the minimum wage to a certain level of the median wage has intensifiedafter a Census and Statistics Department survey found that the median hourly wage of localworkers is HK$58.50.
In Britain, which the Provisional Minimum Wage Commission visited in a study tour in October,the minimum hourly wage is GBP5.80 (HK$68) - 47 per cent of the median salary.
The ratio of minimum wage to median earnings in Japan is 33.3 per cent.University of Hong Kong demographer Dr Paul Yip Siu-fai said it would be wrong to apply theseratios to Hong Kong, adding that the minimum hourly wage should be set between HK$19.50and HK$27.50.
'The earning distribution is different in various places. The same ratio will have a very differenteffect on the labour market in different places. And we should note that the city's rich-poor gapis so huge,' he said.
Hong Kong's Gini coefficient - which measures income inequality on a scale of 0 to 1, where 0 isperfect equality and 1 is perfect inequality - rose from 0.518 in 1996 to 0.525 in 2001 andstood at 0.533 in 2006, the most recent year for which data is available.
'The gap between the rich and the poor in the city is one of the highest in the world. If wesimply set the minimum rate at about 40 per cent like other places, such a gap will be widened,'
His comments came as many business groups have been pushing for a minimum rate of HK$24
- about 40 per cent of the median wage.
Dr David Wong Yau-kar, president of the Chinese Manufacturers' Association, said the groupwould need more time to study the latest figures before proposing a minimum wage level, butnoted that in many developed countries it was 40 to 45 per cent of the median wage. If theseratios were applied to Hong Kong, the minimum wage would be HK$23.40 to HK$26.30 perhour.
Unionist legislator Lee Cheuk-yan, who called for the rate to be set at HK$33, said thecommission should consider the city's high cost of living.
'We should also think of the many low-paid workers trying to feed their families,' he said.
The census found 469,400, or 16.9 per cent, of the city's 2.78 million workers were paid lessthan HK$33 an hour. Some 130,200 earn less than the HK$24 that many business groups aredemanding.
The Provisional Minimum Wage Commission reiterated yesterday it would consider a wide rangeof factors - including economic and labour market conditions, standards of living andcompetitiveness, unemployment and inflation and social harmony - before setting the statutoryminimum wage in July.
Lawmakers meanwhile debated the calculation of work hours and commission arrangementsduring a committee meeting on the minimum wage bill yesterday.
Tourism legislator Paul Tse Wai-chun said it was difficult to calculate the working hours of tourguides conducting organised tours overseas. 'Should the stand-by hours also be counted?(责任编辑：BUG)