For immediate release
In response to the Provisional Minimum Wage Commission’s consultation on the initial Statutory Minimum Wage Rate, the Hong Kong General Chamber of Commerce has presented analysis which suggests that the Commission could consider a rate above $23/hr and below $26/hr.
In its submission, the Chamber stresses that setting the rate too high will force more under-educated, unskilled and less-experienced workers out of their jobs.
Analysis of the government data released in March suggests that at around $26-$27/hr, businesses in the low-paying sectors are likely to begin experiencing difficulties. On the other hand, benchmarking externally such as the UK’s experience, it would be prudent to set the initial minimum wage at about 40% of the median wage in Hong Kong, which will be around $23/hr.
“The analysis presented in our submission has shown that it would be prudent to consider the initial minimum wage at a level between $23/hr and $26/hr. It is a matter of judgement on what would be the acceptable unemployment spill offs by pegging the SMW at $24 or $25/hr,” said Andrew Brandler, Chairman of the Chamber.
As stated by the Chief Executive, the policy objective of the minimum wage is to ensure a sensible balance between forestalling excessively low wages and minimising the loss of low-paid jobs, while sustaining Hong Kong's economic growth and competitiveness. The Chamber urges that the Provisional Minimum Wage Commission should stick to this objective and produce the best possible estimates of additional unemployment at different rates of the minimum wage.
“Only with estimates of potential unemployment can the Commission set the minimum wage at a rate that will increase unemployment by an acceptable amount,” said Chamber CEO Alex Fong.
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