Hong Kong’s new minimum wage still fails the working poor as wealth gap widens
- At HK$40 per hour, it’s below the welfare payment needed for a family of two to survive, and demotivating when the city’s richest earn over 47 times more
- The minimum wage must catch up with inflation and do better than welfare payments in allowing workers to support a dependent
Sun’s remarks about people wanting to pull themselves up by their bootstraps seem an attempt to justify how low the minimum wage is, and also negatively label families who need to turn to the CSSA. But society shouldn’t be encouraged to believe that taking up a low-paying job or even being exploited is praiseworthy.
For many people, the primary goal of work is to earn enough money to support themselves and their family. According to the Minimum Wage Commission in Hong Kong, the purpose of establishing the minimum wage is to strike “an appropriate balance between the objectives of forestalling excessively low wages and minimising the loss of low-paid jobs”, while also sustaining “economic growth and competitiveness”.
Also, over time, fewer people are benefiting from the minimum wage. In 2011, when it was set at HK$28 per hour, 6.4 per cent of employees (about 180,000 people) benefited. But, according to the Census and Statistics Department, by 2021, only 2.6 per cent of employees (about 73,300 people) earned less than HK$40 per hour, and only 0.5 per cent of all employees (about 14,000 people) earned the minimum wage of HK$37.50.
Further, in 2011, the difference between the minimum and median wage was 46.6 per cent. Since then, the gap has widened and the figures – as of 2022 – stand at 50.5 per cent, or HK$38.20. This growing disparity reflects how far the minimum wage has fallen behind.
Government statistics show that, on average, one working member of a family needs to support one other unemployed person (such as a child or senior citizen). So, in our research, we used the average monthly CSSA payment for a two-person family (HK$10,962) as a benchmark to see if the minimum wage can meet basic needs.
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On average, a full-time unskilled worker earning the minimum wage works 49.7 hours a week. If he or she worked 26 days a month and earned HK$40 per hour, they would only make HK$9,651 a month. That is HK$1,300 less than they would have received through CSSA. The new minimum wage is simply not enough to cover basic needs – and it also demotivates workers.
In the first quarter of last year, the average income of the poorest had fallen by 22.9 per cent since the pandemic in 2019. While we are happy to see an increase in the minimum wage, it is still nowhere near enough and does little to improve the lives of low-income workers.
Oxfam Hong Kong believes three factors need to be considered when reviewing or setting the minimum wage: it needs to catch up with inflation; be higher than the average two-person CSSA payment; and enable workers to support one other person who does not have a job.
An almost negligible increase in the minimum wage is unjust and a great disservice to workers who toil in the city day in, day out. The government should do more to improve the lives of low-income workers and close the rich-poor gap.
Kalina Tsang is director general at Oxfam Hong Kong