Minimum Wage Policy in Hong Kong
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Minimum Wage Policy in Hong Kong
Macy Lee (09428526) Calvin Chung (09409572)
POLS 7050 Public Administration Presentation
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History of minimum wage Policies / Laws in other countries
•“sweatshops” in manufacturing industries•1890s :Adopted in New Zealand and
Australia•1909 :Adopted in UK•1938 :a federal minimum wage law
passed by U.S. Congress
Sweatshops
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History of minimum wage Policies / Laws in Hong Kong
•1932: Minimum Wage Ordinance (MWO) but hasn’t been used.
•1990’s: Minimum wage discussion started to become a popular topic in society
•2005-2006: Wage Protection Movement (WPM)
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•2007: The Wage Protection Movement failed
•Feb 2009: Provisional Minimum Wage Commission appointed
History of minimum wage Policies / Laws in Hong Kong (Cont’d)
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Why do we need a minimum wage policy?
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Minimum wage as a basic human rights
•Universal Declaration of Human Rights : Article 25
•International Covenant on Economic, Social and Cultural Rights : Article 7
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Size of the working poverty group is a concern in HK
•Over 1 million people, which accounts for about 14% of the entire HK population, is classified as part of the working poverty group
•Potentially induces social instability if the sources of their income cannot be protected
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Inequality distribution of income in Hong Kong
•Gini coefficient:
1991: 0.476 2006: 0.533;2009*:0.53
(Rank no. 1 in Asia in 2009 from U.N. Development Program, and compare with other developed countries like USA, who has 0.45 Gini coefficient score in 2007)
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Minimum wage policy is a world trend?
•Over 100 countries have different types of minimum wage
•PRC, Guangdong Province: implemented its minimum wage system in 1994
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However, is this legislation is the best choice for HK people?
Working poor
Social instability
Marginal workers
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Existing proposal (WPM) for minimum wage policy
• 1)national-wide
• 2)domestic workers
• 3)clear guidance to determine the wage level
• 4)penalty and implementation plan
• 5)supportive scheme/ subsidy was mentioned in the policy
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Hence….. the legislation of minimum wage is needed
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However…..
this policy is needed to be adjusted and parallelly implemented with other supportive policies
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Policy Objective
Eradicate the working
poverty
Improve the quality of life
for the grassroots
working class
Maintain social
stability
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We propose the following modifications,
implemented in 2 phases
2 phases
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Phase 1 : 2009-2014
•Provisional Minimum Wage Commission determine the level of the of minimum wage
•Multi-industry / national minimum wage
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Phase 1 : How to measure?•Use following criteria to measure
minimum wage :
Cost of living
Consumer price index
Economic performanc
e
Wages of comparable
workers
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Phase 1 : Who can protected by?•The minimum wage system applies to
most workers which also includes:
•Domestic worker
•Employees with disabilities
•Trainees and apprentices
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Phase 1: Others •Enforcement•Penal provisions
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Phase 1: The Supportive Schemes•Enhance the ERB (Employees Retraining
Board) scheme
•Government subsidy – to employer/employee
•Match up policy with “Comprehensive Social Security Assistance Scheme" (CASS)
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Phase 1 Evaluation
•1)By annual review index
•2)Annual review unemployment rate and average wage in HK
•3) Minimum wage policy on inflation risk
•4) Investment on-the-job training
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Phase 2: 2014-2019
•1) Expand function of the minimum wage commission
•2) Extend the coverage of the minimum wage policy ( e.g. by age, by nature of the job)
•3) Enhance the criteria for determining the minimum wage( e.g. labor productivity, employment rate)
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Phase 2 Evaluation
• 1)A 5-year review
• 2)Review economic effect and the cost effect after launch the minimum wage policy
• 3) Review the penalty and monitoring system
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Conclusion 1)A Lower social-cost
policy 2) Able to eradicate the
working poverty as well as to bring a minor negative effect to economy
3) For a long-term aspect, this policy can maintain social stability and enhance resource allocation
Worker Boss
Government
Society
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Thank You!!
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