A Hong Kong NGO has said it is “extremely disappointed” with the HK$2.5 suggested increase to the hourly minimum wage. If approved by the legislature, the minimum wage will rise to HK$40 on May 1 after being frozen at HK$37.50 for four years.

However, the Society for Community Organization (SoCO) said on Tuesday that even with the increase, the minimum wage will offer less purchasing power than it did 12 years ago.

Cleaning workers. Photo: Kyle Lam/HKFP.

The Labour and Welfare Bureau announced in a Tuesday statement that the Chief Executive John Lee and his cabinet had adopted the new statutory minimum wage rate recommended by the Minimum Wage Commission (MWC).

The proposal will be tabled in the Legislative Council next Wednesday and come into effect on May 1, if approved by lawmakers.

Chris Sun, the secretary for labour and welfare, said “the recommendation of the MWC has struck an appropriate balance between the objectives of forestalling excessively low wages and minimising the loss of low-paid jobs, while giving due regard to sustaining Hong Kong’s economic growth and competitiveness.”

Chris Sun
Secretary for Labour and Welfare Chris Sun. File photo: Kyle Lam/HKFP.

However, SoCO said in a press release on Tuesday afternoon that the adjustment “showed that authorities were not committed to improving workers’ rights,” as the proposed increase failed to catch up with inflation.

Last October, a labour union urged the government to increase the wage to HK$46, saying that HK$40 would be insufficient for protecting the livelihoods of low earners.

Citing data from the Census and Statistics Department, the NGO said the consumer price index for low-income families had soared by 46.0 per cent from 2010 to August 2022.

After accounting for inflation, SoCO said the proposed adjustment would offer a purchasing power equivalent to HK$27.4 in 2010, which was lower than when the minimum salary rate was introduced at HK$28 in 2011.

Additionally, the NGO said the suggested rise would only benefit around 73,300 workers who currently earn less than HK$40 per hour. That was just 2.4 per cent of Hong Kong’s total work force in 2021, excluding foreign domestic workers, according to the Census and Statistics Department.

SoCO added that the MWC lacked transparency on how it arrived at its recommendations. “Outsiders have no way to examine whether there are inadequacies. [It] also lacks an objective mechanism for adjustment, and its decisions are arbitrary,” it wrote.

SoCO and underprivileged groups meet the press on October 19. File photo: Peter Lee/HKFP.

The MWC’s current approach to revise the minimum wage every two years has caused the statutory rate to “seriously lag behind” the actual economic environment, SoCO said.

The organisation urged the government to raise the minimum pay rate to at least HK$50, increase the frequency of its revision to once a year, and create an “objective and scientific” calculation mechanism for future adjustments.

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Peter Lee is a reporter for HKFP. He was previously a freelance journalist at Initium, covering political and court news. He holds a Global Communication bachelor degree from CUHK.