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AFC-Newsletter(10)
Members of the functional constituencies in LegCo have rejected several times: in 2004, 2005, 2006 respectively on the establishment in the minimum wage. On 11 October 2006, the Chief Executive announced in the Policy Address that the Government will implement the "Wage Protection Movement" with businesses and the labour sector. In addition to all government departments, the Government also encourages the public and relevant agencies in the procurement process of outsourcing of cleaning and security services, to adopt the practice of the establishment of a fixed minimum wage as conducted by the Government. Because the fact that the “Wage Protection Movement " is not legally binding, the project is doomed to failure from the beginning, they cannot relieve the pain of the extremely low wages from most of the grassroots work types. After two years of implementation, the "Wage Protection Movement" has been suspended. The implementation of the scheme delayed the much-needed minimum wage legislation.
Members of the Legislative Council Repeatedly Rejected the Motion to Set a Minimum Wage
In most countries of the world, whether they are developed or developing countries, has been successively implementing minimum wage protection legislation. This protection is to allow workers to receive a minimum income to meet the workers and their families the basic necessities of life, to avoid salaries being too low the social tragedy that arose. As the "International Labour Convention" stated: The fundamental purpose of minimum wages is to "fight poverty, ensure all workers and their families to meet basic needs."
The Status of Grass-roots workers
As there has been economic restructuring since the 1980s, a large number of factories were relocated, the original manufacturing workers were laid off and made severance, many of them face unemployment and underemployment problems. There were as many as 940,000 engaging in the manufacturing sector in Hong Kong in 1986 , which constituted the largest share of employment. Due to persistent capital outflow, the number of persons employed in the manufacturing sector drastically reduced by 178,000 people between 1981 and 1991, the "de-industrialization" process continued to accelerate throughout the 90's, large numbers of workers can only go to primary services (such as cleaning, security, catering, etc.) to find work.
Due to the lack of employment opportunities in the market, as a result of the emphasis on high value-added sectors of economic development it is difficult to improve the situation of the grassroots workers, by changing working conditions. They have to face a long-term instability in employment and to be predominately engaging in causal work, generally speaking, they also have to endure long hours, low wages, and poor working conditions.
Since after the mid 90s, the unemployment rate deteriorated, even in view of the economic recovery after financial turmoil, the unemployment rate is still about 6%, and the grassroots felt being the most hard-hit. In recent years, there was even a trend of the outsourcing of services such as paging services and the handling of bank documents, even grassroots white-collar workers also face the threat of being laid-off. Many economists admit that Hong Kong has a "structural unemployment" problem. Unless the structural problems have been resolved, otherwise the economy will not improve, the grassroots would not be able to use the collective bargaining power of workers when negotiating adjustments of their income. In the survey conducted by The Confederation of Trade Unions conducted in mid-2006, it showed that even at times of an economic recovery, workers cannot be benefited during that, while the wages fell sharply on many types of work over the past 5 years.
|
基層工種“Grassroots” jobs |
00 年時薪(HK$)Hourly Wages in 2000 (HK $) |
05 年時薪(HK$)Hourly Wages in 2005 (HK $) |
調幅Changes (in %) |
|
酒樓點心員Dim sum waiters in restaurant |
23.723.7 |
22.922.9 |
-3.4%-3.4% |
|
Dishwasher in 酒樓洗碟工 Restaurants |
28.828.8 |
24.224.2 |
-16%-16% |
|
快餐店清潔工Fast-food restaurant cleaners |
26.126.1 |
22.722.7 |
-13%-13% |
|
一般清潔工General cleaners |
25.925.9 |
23.123.1 |
-10.8%-10.8% |
|
廁所清潔工Toilet cleaners |
不詳Unknown |
19.519.5 |
未能比較Cannot be compared |
|
保安員Security Guard |
26.626.6 |
25.425.4 |
-4.5%-4.5% |
|
Hair Washer in Barber Shop理髮店洗頭員B |
2525 |
23.823.8 |
-4.8%-4.8% |
Source: Hong Kong Census and Statistics Department (Statistics calculated from the figures in September of the prevailing year)
Investigations on Minimum Wage From Overseas Academic Research
From past surveys and studies of academic research overseas indicates, the setting up or improve the amount of the minimum wage does not necessarily lead to the loss of jobs. One example often cited is the research conducted by the American scholars D. Card and A. Krueger. Their studies on the fast-food industries of the states of New Jersey, Pennsylvania and Texas found that modest increase in the minimum wage will not only lead to rising unemployment, the increase in wages will also help in reducing the company's job vacancies and staff loss. Another recent example is the United Kingdom since the introduction of a universal minimum wage, the unemployment rate has dropped from 6% in 1999 down to 5.1% in 2001. One of the academic studies conducted on minimum wage by the British economist Michael (S. Machin) pointed out that the reason for the introduction of the minimum wage is to increase the spending power of the low-income people, hence it would bring about a positive effect on the internal demand for economic and employment market.
In addition, many well-known economists support their research, including Nobel Laureate economist Joseph E. Stiglitz, and even from scholars who oppose the minimum wage, such as Neumark and Wascher, the former refers to Card and Krueger's study compels us to not denied minimum wage, as they have commented "Even if the introduction of minimum wage will bring negative effects, it would not impose a massive impact." Stiglitz and secondary research among economists that concerns with the employment of labor economists, often questions, with a high level of suspicion, of the doctrine in which the introduction of minimum wage would result in an increase of unemployment (Stiglitz, 2002). Although being a long-time critic of minimum wage, a detailed analysis, Neumark and Wascher, while teaching at Michigan State University and served in the Federal Reserve Board, have studied the data from Card and Kruger, have also obtained the same conclusions of Card and Krueger that the increase of the New Jersey minimum wage in 1992 does not reduce the employment rate of the fast-food industries of the State (Schmitt, 1996).
Minimum Wage Can Reduce Government Subsidies
Any allegations on minimum wage as being welfarism are a "double" misunderstanding. First, the minimum wage is not a form of welfare being provided by the Government, the Government will not involve any additional expenditure. On the contrary, the establishment of the minimum wage will help reduce the government's public expenditure.
In recent years, more and more workers, even though they have found a job, is still unable to leave the Comprehensive Social Security Assistance (hereafter the CSSA) net. In December 2005, low income CSSA cases are amounted to 15,000, an 11.8% of increase then the same figures in 2004. In low-income CSSA cases, most of the laborers engaged in cleaning workers, assistants and security guards and other low-paid jobs, there are 30% of the cases in which workers engaging in those sectors receives CSSA for 60 consecutive months or more. As wages continue to decline among grassroots jobs, even though the labourer could re-enter the labour market, they could not be able to leave the CSSA net. If the Government is willing to legislate on a minimum wage, and not to use the public money to subsidize and continuing the situation of the employment of low income workers by the unscrupulous employers, it could also bring about an annual reduction of 200 million of low-income CSSA expenditure.
Second, Hong Kong's social security is too little rather than too much, welfare policy is still very backward and is not over-developed. Hong Kong's per capita GDP is more than US$20,000, higher than many developed countries, but the welfare system is still way backward compared to many developing countries. As the Government has failed to achieve wealth redistribution through social welfare, this has resulted in the worsening of wealth disparity, ranking in the world. During the past two decades, the Gini coefficient in Hong Kong increased from 0.451 in 1981 to 0.535 in 2006, reflecting the fact that the low income groups are unable to share in the fruits of prosperity. In the research study report passed by the Legislative Council in February 2006 suggested that the wage-earners in Hong Kong receiving HK$5,000 or lower has tripled compared with the same figures eight years ago.
In view of the above situation, members of the functional constituencies in LegCo have rejected several times: in 2004, 2005, 2006 respectively on the establishment in the minimum wage. On 11 October 2006, the Chief Executive announced in the Policy Address that the Government will implement the "Wage Protection Movement" with businesses and the labour sector. In addition to all government departments, the Government also encourages the public and relevant agencies in the procurement process of outsourcing of cleaning and security services, to adopt the practice of the establishment of a fixed minimum wage as conducted by the Government. Because the fact that the “Wage Protection Movement " is not legally binding, the project is doomed to failure from the beginning, they cannot relieve the pain of the extremely low wages from most of the grassroots work types. After two years of implementation, the "Wage Protection Movement" has been suspended. The implementation of the scheme delayed the much-needed minimum wage legislation.