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 19 November 1999 Restraint in Managerial Salaries Continues Comment by the Chamber Chief Economist, Ian K Perkin, on the managerial and professional salary figures for the year to June 1999. The business community's attempts to restrain salary increases in the wake of the east Asian financial crisis and local recession has been a modest success with overall managerial salaries down 0.8 per cent in the year to June. With deflation in effect throughout most of the year, however, there was a rise in the purchasing power of overall managerial salaries by three per cent. All of the decline in nominal salaries appears to have come from lower salaries paid to new entrants to the managerial ranks during the year, with managers staying in their jobs receiving a modest increase. While nominal salaries of all managers (or nominal salary index A) were down 0.8 per cent, salaries of existing managers (or nominal salary index B) were up 0.6 per cent. This gave them a real increase of 4.4 per cent, after accounting for deflation. The ability to hold the line on salaries and wages in the past year or so will not have a dramatic effect on increasing Hong Kong's overall competitiveness. Local managers remain amongst the highest paid in the world. It will, however, give the economy some breathing space. This is one of the reasons why the Hong Kong General Chamber of Commerce has again recommended a wages and salaries freeze for the year 2000. Again, with deflation continuing, even if nominal salaries are frozen there will be an overall increase in the purchasing power of existing salaries. For further information, contact Ian K Perkin on 2823-1242
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