Hong Kong to introduce minimum wage. Singapore?

Singapore Democrats

Hong Kong, one of the last few modern economies holding out on minimum wage, will likely pass a bill next week that will legislative minimum wage in the territory. According to legislators, the law is meant to protect workers from being exploited.

The Singapore Democrats have been calling for more than a decade for a similar law to be introduced in Singapore. We have said time and again that the most vulnerable workers are being taken advantage of by being paid wages that does not provide them a decent living.

For example, elderly workers are routinely paid a little more than $3 an hour for doing menial jobs. This works out to less than $600 a month for a full-time job. How does one survive on such an income in an expensive economy like Singapore?

Hitherto, Hong Kong has also resisted paying minimum wage and this has led to both economies having one of the biggest income disparities in the world.    

If Hong Kong passes the legislation, Singapore will be one of the few countries left that does not have such a mandated provision. Over 90 percent of countries across the world have minimum wage in one form or another. The few countries that have no laws or regulations on minimum wage are Bahrain, Qatar, UAE, Tonga, Brunei, Somalia, and, of course, Singapore.

A Minimum Wage Commission will be established in Hong Kong comprising of trade unionists, employers and scholars to determine the level of minimu wage. Currently many Hong Kong employers pay their workers less than US$4 (S$6) an hour. This is already higher than what Singapore pays its low-wage workers.

The SDP has laid out a compelling case for minimum wage in Singapore in our Alternative Economic Programme (see here). We repeat our call for the Government to introduce a similar legislation to that in Hong Kong. This will ensure that our workers are not exploited and that prosperity and progress are enjoyed by all, not just the wealthy elite.

Hong Kong lawmakers debate minimum wage
14 Jul 10

Hong Kong lawmakers resumed debate Wednesday on a bill that may result in the region’s first statutory minimum wage.

The Minimum Wage Bill is a controversial piece of legislation that lawmakers hope will protect the most vulnerable workers in Hong Kong, one of the few places in the world without any sort of minimum wage law.

The debate is set to take two to three days.

A recent government survey showed that around half a million workers in Hong Kong earn less than $4 an hour. These include low-skilled workers from the catering, retail, and cleaning industries.

According to Man Hon Poon, a policy researcher at the Hong Kong Confederation of Trade Union, the lack of legal protection for workers has led to serious exploitation.

“Workers in restaurants have to work for 12 hours or even 14 hours a day to earn a living,” he said. “They cannot even go to the cinema.”

Legislator Tommy Cheung, however, claims that the government should not interfere with the free market economy, which he says has served Hong Kong well in the past. A minimum wage could deter investors and lead to increased unemployment, said Cheung, who represents the catering industry.

“There is one fear within the industry, that they would have to close down,” he said. “When you see a closure, everyone loses out.”

The government first proposed the current bill in 2008 following a failed attempt at a voluntary minimum wage. Labor unions, however, have been lobbying for a minimum wage since 1998, following the Asian financial crisis.

The rate of the minimum wage has also been under great debate. Trade unions have been demanding a minimum wage of $4 while employer groups have been asking for $3 per hour.

If the bill passes this week, the rate of the minimum wage will be set by the Minimum Wage Commission, a consortium of trade union members, employers and scholars, in the coming months.

Once the chief executive approves the rate, employers will have six months to implement the law.

The Hong Kong government estimates that the earliest the minimum wage law may take effect is May 2011.


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