Wage freeze looms for low earners

The minimum wage could be frozen, in a first since it was introduced in 2011, at HK$37.50 per hour until May 2023, according to sources. It is understood that members of the Minimum Wage Commission have differing opinions over the wage adjustment, but generally agreed on freezing...

Staff Reporter

Friday, September 25, 2020

The minimum wage could be frozen, in a first since it was introduced in 2011, at HK$37.50 per hour until May 2023, according to sources.

It is understood that members of the Minimum Wage Commission have differing opinions over the wage adjustment, but generally agreed on freezing wages amid economic downturn.

The commission is drafting a report to be submitted to Chief Executive Carrie Lam Cheng Yuet-ngor next month and upon approval by the Executive Council, around 21,000 grassroots workers receiving minimum wage will have their pay frozen from next May.

Sources said the commission, which is responsible for reviewing the minimum wage every two years, has had two meetings to discuss the matter, during which members representing the labor sector fought for the minimum wage to be raised to at least HK$42.

They said the existing level at HK$37.50 already lags behind inflation and many grassroots workers have had their salaries frozen or cut, with some even forced to take no-pay leave amid the pandemic.

But business sector members and academics said the social unrest that started last year and the ongoing pandemic have hit all sectors, in particular catering and retail, and that they expected businesses would not return to normal in the coming year.

Sources said these members believe the minimum wage should be frozen or even lowered due to the poor economy.

But members representing employers once suggested slightly raising the minimum wage to HK$38, in exchange for the agreement of members representing the labor sector so as to reach a consensus.

However, the latter turned down the proposal, saying the 50-cent raise is unreasonable.

The commission could not reach a consensus after two meetings, the first time since 2011.

The minimum wage was first introduced at HK$28 on May 1, 2011. There have been upward adjustments in all previous reviews in 2013, 2015, 2017 and 2019, with the last increase at 8.7 percent from HK$34.50 to HK$37.50.

Apart from government representatives and commission chairwoman Priscilla Wong Pui-sze, who is a barrister, the nine members are three each from the labor and business sectors and three economists.

Labor-sector lawmaker Michael Luk Chung-hung, from the Hong Kong Federation of Trade Unions, said he is surprised to hear about the freeze.

He said his party suggests raising the minimum wage to HK$43.50, but "even if it's too high, it should at least be HK$39.30 to cover the 4.8 percent inflation over the past two years."