Traditional Chinese Simplified Chinese Email this article
Minimum Wage Commission delighted by acceptance of its recommended statutory minimum wage rate

The following is issued on behalf of the Minimum Wage Commission:

     After prudent and objective deliberations as well as iterative discussions, the Minimum Wage Commission (MWC) reached a consensus and recommended the statutory minimum wage (SMW) rate be adjusted upwards to $30 per hour.

     "We are delighted to learn that the Chief Executive in Council has accepted our recommendation on the SMW rate after considering the Report of the MWC," said the MWC Chairperson, Mr Jat Sew-tong.
     "We hope that the recommended SMW rate under unanimous consensus and supported by all members of the MWC could be accepted by various sectors of society and would benefit the overall interest and development of Hong Kong," Mr Jat said.

     Based on the data of the 2011 Annual Earnings and Hours Survey conducted by the Census and Statistics Department (C&SD), the MWC estimated that around 327 200 employees would be covered by the recommended SMW rate, accounting for 11.7 per cent of all employees. Taking into account the trend of pay rises up to mid-2012, it was estimated that the number of employees involved was about 223 100, accounting for about 7.9 per cent of all employees. With the hourly wages of these 327 200 employees involved adjusted upwards to the recommended SMW level and taking into account total wages received by employees as well as the impact of a knock-on effect, the average wage increase of employees involved was estimated at 7.3 per cent.

     As for the impact on businesses, taking into account total wages received by employees as well as the additional labour costs arising from a knock-on effect, the total additional wage bill would rise to around $2.0 billion, up by approximately 0.3 per cent. The impact on most sectors (including the low-paying sectors) should be moderate.

     As regards the impact on the unemployment rate, it was estimated that the overall unemployment rate would go up by about 0.3 percentage points assuming that the real economic growth for the first half of 2013 is at 1.0 per cent year-on-year. As the prevailing unemployment rate in Hong Kong is still relatively low, the impact of the recommended rate on the unemployment rate is unlikely to lead to a marked deterioration in the labour market. For the impact on inflation, should there be a full pass-through of additional wage bills on prices of products and services, it was estimated that the Composite Consumer Price Index (CPI) would go up by about 0.3 to 0.4 percentage points. As a full pass-through to consumer prices would be unlikely, the actual impact on inflation should be lower than the above estimate.

     The MWC adopted an evidence-based approach in reviewing and making its recommendation on the SMW rate. Apart from making reference to the relevant data in a Basket of Indicators to grasp the socio-economic conditions during the implementation of the initial SMW rate and its impact, it undertook detailed analysis and conducted assessment based on wage distribution data of the C&SD and findings of other surveys. The MWC made reference to the views of stakeholders and interested parties to understand the impact of the initial SMW rate on society, the economy and different sectors (in particular the low-paying sectors), and their concerns on the SMW rate and its review. Assessment was also conducted to estimate the possible impact of different SMW levels on employees, businesses, inflation and the unemployment rate.

     As there would inevitably be a time lag between the date of making its recommendation and the date of its implementation, the MWC took into account the short-term economic and labour market outlook to conduct scenario testing with an attempt to have more thorough consideration when reviewing the SMW rate.

     The full text of the MWC Report can be downloaded from the MWC's website:

Ends/Wednesday, December 12, 2012
Issued at HKT 18:57


Print this page