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Following is a question by the Hon Kwok Wai-keung and a reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, in the Legislative Council today (October 24):
Question:
The Minimum Wage Ordinance provides that the Minimum Wage Commission (MWC) is required to review the statutory minimum wage rate at least once in every two years. In conducting the review, MWC will take into account a basket of relevant data including social, economic and employment indicators in the past year. As such, MWC's recommendation about the minimum wage rate may be made with reference to the economic data three years ago and lags behind the actual economic situation by three years. In this connection, will the Government inform this Council whether it will:
(a) conduct a comprehensive review of the Minimum Wage Ordinance;
(b) shorten the period of review of the minimum wage rate from once every two years to once every year; and
(c) formulate reference criteria which are more specific and objective, so as to minimize the contention among MWC members in reviewing the minimum wage rate and shorten the deliberation time?
Reply:
President,
My reply to the question raised by the Hon Kwok Wai-keung is as follows:
(a) The implementation of statutory minimum wage (SMW) in Hong Kong is the culmination of years of discussion and concerted effort of all stakeholders including the Legislative Council (LegCo). It is a significant milestone in the development of Hong Kong's labour policy. In formulating the minimum wage legislation, the Administration undertook extensive consultation and gauged the views of different stakeholders. All the provisions of the Minimum Wage Ordinance (MWO) were thoroughly discussed and scrutinised before passage by LegCo of the last term.
The implementation of SMW since May 1, 2011, the Labour Day, has been smooth. The labour market has remained stable and low-income employees have enjoyed substantial improvement in their employment earnings. The latest figures in June to August this year showed that the average employment earnings of the lowest decile full-time low-income employees registered a year-on-year growth of 6.3% (or an increase of 4.6% net of inflation), outpacing the overall growth of 3.4% (or 0.3% net of inflation).
SMW has been implemented in Hong Kong for only a year or so. The Administration will continue to closely monitor the implementation of SMW. At this stage, there is no proven need for a comprehensive review of MWO.
(b) Given the high degree of external orientation of our economy, Hong Kong is more susceptible to global economic vicissitudes. Any changes in the external environment may have impact on the Hong Kong economy. As the time of implementing SMW in Hong Kong is still short, its full implications can only be fully assessed after a longer implementation period.
It is a pragmatic arrangement under MWO for the SMW rate to be reviewed at least once in every two years. The SMW rate is determined on the basis of an evidence-based approach. The Census and Statistics Department conducts a survey every year to collect detailed information on wage levels and distribution among employees in Hong Kong. In the event that there is evidence supporting the need for a review of the SMW rate, a review can be conducted within less than two years.
(c) As stated clearly in MWO, when reviewing and making recommendation on the SMW rate, the Minimum Wage Commission (MWC) must have regard to the need to maintain an appropriate balance between the objectives of forestalling excessively low wages and minimising the loss of low-paid jobs, and the need to sustain Hong Kong's economic growth and competitiveness.
In its review of the SMW rate, MWC makes reference to a basket of indicators which reflect the latest socio-economic and employment situation. It undertakes detailed analyses on wage distribution data and findings of other surveys, and conducts assessment of the impact of the SMW rate to take account of the changing social, employment and economic environment in an effective, timely and flexible manner. Through extensive consultation, MWC also grasps the effects of the SMW rate on various sectors of society and their related views.
SMW has far-reaching impact on a multiplicity of areas like labour market, employment, society, economy, inflation, productivity and competitiveness, and these factors interact constantly. There are also diverse views and concerns about the SMW rate in the community. The Administration considers that the existing arrangement is specific, objective and appropriate.
Ends/Wednesday, October 24, 2012
Issued at HKT 15:57
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