Recently. there has been a argument on the topic of a statutory minimal pay. Different parties have different point of positions about it. The union members believe puting a higher sum can assist to cut down the continuously increased wealth spread in Hong Kong. but the business communities worry that it will increase the operating costs of their concerns. I will discourse the pros and cons of a statutory minimal pay in the undermentioned paragraphs. For the advantages. foremost. a minimal pay can coerce employers to offer sensible wages to their employees and give them guidelines on how rational wages should be set.

This can assist to protect employees from being exploited. Second. the job of income inequality can be addressed by increasing low-income groups’ wages so that it can assist to advance societal justness and greatly better societal harmoniousness and stableness. Furthermore. the policy can promote the unemployed citizens to rejoin the work force and therefore cut down the load on the authorities. Although there are many advantages of puting a minimal pay. there are some drawbacks excessively. The unemployment rate may lift after implementing the lower limit pay jurisprudence.

Due to the addition of operating costs or production costs. some employers may put off their staff. And it may deter employees to better their on the job attitude and accomplishments as their rewards are protected under the statutory minimal pay system. working inducement may therefore go low. When we talk about the degree of a statutory minimal pay. we have a batch to concerned about. for illustration. the economic state of affairs. GDP etc. I think the populating criterion is really high in Hong Kong at present. so the degree of a statutory minimal pay should be high plenty to run into a family’s day-to-day disbursals.

At the same clip. we should besides see the fiscal load on the employers. If non. puting off staff or even shuting down the concerns may be the consequence. The authorities. hence. should see all these issues. believe twice and do a wise determination. From – hypertext transfer protocol: //www. tkp. edu. hk/newsletter/archives/2610? ? ? ? ? ? News Point Secretary for Labour and Welfare Matthew Cheung Kin-chung ( ? ? ? ? ? ? ? ? ? ? ) explained how the members of the Provisional Minimum Wage Commission ( ? ? ? ? ? ? ? ? ? ) came to be agreed on the initial statutory minimal pay rate. Harmonizing to him. they considered four chief standards: 1.

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it should non be excessively low ; 2. it would non do low-paid occupations to vanish in big Numberss ; 3. it would non suppress economic development ; 4. it would non significantly damage Hong Kong’s competitory advantages. To protect labour rights. Hong Kong may necessitate non merely minimal pay statute law but besides standard working hours statute law ( ? ? ? ? ? ? ) . The Legislative Council has adopted a gesture to name for the passage of such a jurisprudence. To promote underprivileged citizens and low-income employees populating in distant territories to happen work or remain in employment. the authorities launched in 2007 a pilot conveyance support strategy ( ? ? ? ? ? ? ? ) .

Under the strategy. eligible citizens have been provided with time-limited conveyance allowances. The Labour Department ( ? ? ? ) is responsible for protecting other labour rights enshrined in assorted pieces of labour statute law ( such as the Employment Ordinance ( ? ? ? ? ? ? ) ) . Minimal pay a issue for people to make up one’s mind: Hong Kong main Hong Kong Special Administrative Region ( HKSAR ) Chief Executive Donald Tsang on Friday continued to support his determination non to pass on the controversial minimum- pay issue in his latest Policy Address.

Talking on RTHK Friday. two yearss after showing his Policy Address. Tsang said he did non desire to see the issue dealt with in tribunal as some legislators have said they would press in front with programs to seek a judicial reappraisal after the authorities decided non to pass for a minimal pay at the minute. “It is a affair for the people to make up one’s mind. non the tribunals. ” Tsang told a call-in wireless show Friday forenoon. “I think we should seek to work out this affair amicably. in the community. ” “Fundamentally it is non even the legislative assembly and the authorities.

It is a affair for the people. ” he added. in response to what he called “a really strong brotherhood and labour voice” on lower limit pay. In Hong Kong. the statements on lower limit pay between the labour and the employers have lasted for many old ages but without consensus. The labour has ever pressed in front to pass on minimal pay among the security and cleaners sectors in peculiar every bit shortly as possible. But employers said in order to vie in a globalized economic system. it is a staying advantage for Hong Kong non to coerce employers to accept the trade via statute law.

“If this affair were pushed through the Legislative Council at the minute. ” Tsang said. “it would be a really. really bloody fight… there would be serious statements over this. the community would be lacerate apart. ” In his policy reference. Tsang proposed to establish a Wage Protection Movement for workers in the security and cleansing sectors. He promised to pass on the minimum-wages issues two old ages subsequently if the motion fails and employers are non paying market rates. ‘Hong Kong lawgivers debate minimal pay CNN 14 Jul 10 Hong Kong lawgivers resumed argument Wednesday on a measure that may ensue in the region’s foremost statutory minimal pay.

The Minimum Wage Bill is a controversial piece of statute law that lawgivers hope will protect the most vulnerable workers in Hong Kong. one of the few topographic points in the universe without any kind of lower limit pay jurisprudence. The argument is set to take two to three yearss. A recent authorities study showed that around half a million workers in Hong Kong earn less than $ 4 an hr. These include low-skilled workers from the catering. retail. and cleaning industries. Harmonizing to Man Hon Poon. a policy research worker at the Hong Kong Confederation of Trade Union. the deficiency of legal protection for workers has led to serious development.

“Workers in eating houses have to work for 12 hours or even 14 hours a twenty-four hours to gain a life. ” he said. “They can non even travel to the film. ” Legislator Tommy Cheung. nevertheless. claims that the authorities should non interfere with the free market economic system. which he says has served Hong Kong good in the yesteryear. A minimal pay could discourage investors and lead to increased unemployment. said Cheung. who represents the catering industry. “There is one fright within the industry. that they would hold to shut down. ” he said. “When you see a closing. everyone loses out. “

The authorities foremost proposed the current measure in 2008 following a failed effort at a voluntary lower limit pay. Labor brotherhoods. nevertheless. have been buttonholing for a lower limit pay since 1998. following the Asiatic fiscal crisis. The rate of the lower limit pay has besides been under great argument. Trade brotherhoods have been demanding a minimal pay of $ 4 while employer groups have been inquiring for $ 3 per hr. If the measure passes this hebdomad. the rate of the minimal pay will be set by the Minimum Wage Commission. a pool of trade brotherhood members. employers and bookmans. in the approaching months.

Once the main executive approves the rate. employers will hold six months to implement the jurisprudence. The Hong Kong authorities estimations that the earliest the minimal pay jurisprudence may take consequence is May 2011. hypertext transfer protocol: //edition. cnn. com/2010/WORLD/asiapcf/07/14/china. hong. kong. minimal. wage/index. hypertext markup language? hpt=T2 & A ; fbid=cFYYtTV0ap3 The Minimal Wage: An Unfair Advantage for Employers October 1989 • Volume: 39 • Issue: 10 • Print This Post • 1 remark Professor Boudreaux teaches economic sciences at George Mason University in Fairfax. Virginia. Suppose you want to assist the Sellerss of a specific merchandise.

One thing you might desire to make is seek to guarantee that a buyers’ market for that good or service isn’t created. A buyers’ market is an economic state of affairs that favors purchasers over Sellerss. For illustration. everyone hopes that the real-estate market in his hometown will be a sellers’ market when the clip comes to sell his house. No 1 wants to hold to sell a house when existent estate is in a buyers’ market. Nevertheless. people who advocate mini- mum-wage statute law to better the batch of unskilled workers in consequence support authorities creative activity of a buyers’ market as a manner to assist Sellerss of unskilled labour.

Freely Traveling Monetary values: The Great Equalizer Economics and common sense teach us that. other things being equal. as the monetary value of a merchandise rises. more units will be offered for sale but fewer units will be demanded by consumers. If a monetary value is excessively low. there will be an extra demand for the good or service in inquiry. and purchasers will vie for the limited measures available by offering higher monetary values to Sellerss. If a monetary value is excessively high. there will be an extra supply. and Sellerss ( who can non sell all that they wish at the high monetary value ) will vie for clients by offering lower monetary values.

So long as there are no government-imposed limitations on monetary values. monetary values will be given to set in each market so that the measures demanded will be equal to the measures supplied. It is of import to recognize that monetary values change merely when there are dickering inequalities between purchasers and Sellerss. Monetary values rise merely when the sum demanded by purchasers is greater than the sum supplied by Sellerss ; monetary values fall merely when the sum demanded by purchasers is less than the sum supplied by Sellerss. Put another manner. monetary values rise merely when there is a sellers’ market. and monetary values fall merely when there is a buyers’ market.

The rise or autumn of monetary values. nevertheless. eliminates the inequality of supply and demand and. therefore. eliminates the conditions that people describe as sellers’ markets and buyers’ markets. Freedom of monetary value accommodations ensures equality of dickering power among purchasers and Sellerss. Freely traveling monetary values are the great equaliser. Employers compete for human labour services. like most things of value in a society based on private belongings in a market in which Sellerss and purchasers engage in voluntary exchanges.

Wage rates ( in combination with other signifiers of compensation ) are determined in the labour market. If this market isn’t hampered by authorities. rewards will invariably set so employers and employees enjoy equal bargaining power. Of class. unskilled workers aren’t every bit productive as workers with greater accomplishments. and so pay rates for skilled labour tend to be higher than rewards for unskilled labour. It is a myth. nevertheless. that extremely skilled workers enjoy greater dickering power with employers than do workers with fewer accomplishments.

If pay rates are free to set to their market-clearing degrees. unskilled workers will bask every bit much bargaining power as the most extremely skilled workers. because freely traveling pay rates adjust so that the sum of each type of labour demanded will be given to be the sum supplied. Employers can hold no saloon gaining advantage over even the most unskilled workers if pay rates are free to travel to the degrees at which the sum of labour services demanded is equal to the sum supplied by workers. Freely moving pay rates are the great equaliser of dickering places among employers and employees. The Minimal Wage: The Great Unequalizer

Minimum-wage statute law prohibits rewards from falling low plenty to compare the figure of people seeking occupations with the figure of occupations being offered. As a consequence. the supply of unskilled labour for good exceeds the demand for’ unskilled labour at the government-mandated minimal pay. Minimum-wage statute law therefore creates a buyers’ market for unskilled labour. And as in all buyers’ markets. purchasers ( employers ) have an unequal bargaining advantage over Sellerss ( unskilled workers ) . Consider. for illustration. a grocer. Suppose he decides that a clean parking batch will pull more clients. and that this will increase his gross revenues by $ 10 per twenty-four hours.

Of class. the grocer will pay no more than $ 10 a twenty-four hours to hold his parking batch cleaned. He so investigates how best to acquire this done. Suppose there are two options available to him. One manner is to engage a reasonably skilled worker who can clean the parking batch in one hr. while the 2nd manner is to engage two unskilled workers who. working together. will acquire the occupation done in the same clip. Other things being equal. the grocer will do his determination based upon the comparative cost of skilled versus unskilled labour. Let’s assume the skilled worker will bear down $ 6 an hr. while each of the unskilled workers will bear down $ 2. 50 an hr.

In a free labour market. the grocer will engage the two unskilled workers be-cause. in entire. it costs him $ 5 per hr for the unskilled workers whereas it would be $ 6 for the one skilled worker. But what will the grocer do if a minimal pay of $ 4 per hr is imposed? To engage the two unskilled workers will now be him a sum of $ 8 an hr. The skilled worker now becomes the better deal at $ 6 an hr. Minimum-wage statute law strips unskilled workers of their one bargaining bit: the willingness to work at a lower pay than that charged by workers with more accomplishments. The consequence is unemployment of the unskilled workers.

See another consequence of the minimal pay. Because there are more people who want occupations at the minimal pay rate than there are occupations to travel around. employers have small inducement to handle unskilled workers with regard. If an employer mistreats an unskilled worker. the employer need non be concerned if the worker quits. After all. there are plentifulness of unemployed unskilled workers who can be hired to make full places vacated by workers who quit. In add-on. the lasting buyers’ market created by the minimal pay encourages employers to know apart in their hiring and fire determinations on the footing of sex. race. faith. and so on.

Suppose an employer has two minimum-wage occupations available. but there are 10s unskilled workers who apply for the occupations. Bemuse the workers are prohibited from viing with each other on the footing of pay rates. other factors must find which of the workers will be hired. If the employer dislikes inkinesss. and if there are at least two non-black workers who have applied for employment. no black workers will be hired. With a excess of unskilled workers. there is no economic inducement to halt this bigoted employer from indulging his biass.


Minimum-wage statute law creates an extra supply of unskilled labour and gives the purchasers of unskilled labour an unjust bargaining advantage over the Sellerss of unskilled labour. It is a phantasy to believe that the public assistance of unskilled workers can be improved by such statute law. Unskilled workers shouldn’t be restricted to a lasting buyers’ market. Hong Kong Sets Minimum Wage At HK $ 28 Per Hour The city’s new minimal pay eventually has been released. The HK $ 28/hour base is approximately the cost of two cartons of milk. a fast nutrient repast or four premium beers.

Secretary for Labor and Welfare Matthew Cheung Kin-chung said the new pay. set to come into consequence May 1 if it passes the legislative assembly. represented an mean pay addition of 16. 9 per centum impacting some 314. 600 employees. The cost will be approximately HK $ 3. 3 billion. Tabled for treatment at the Legislative Council Wednesday. the new pay was a milepost in the protection of the rights of low-income workers and a hard-won accomplishment given the contention amid the city’s laissez faire system. Chief Executive Donald Tsang said.

To countervail the impact on the labour market. the Labor Department will better employment services for the immature. middle-aged and those with disablements. he added. By the Minimum Wage Commission’s estimations. the new minimal pay sums to 48 per centum of Hong Kong’s average hourly pay during the 2nd one-fourth of 2009. More than half ( 61. 4 per centum ) of the more than 314. 000 workers expected to profit from the new minimal pay are adult females. A one-fourth of those who will profit are over the age of 65 and 18 per centum work in a parttime capacity. Cheung said. On a sector footing. 35.

5 per centum of workers are from security and cleansing companies while 19 per centum work in eating houses and 16 per centum in retail. Cheung said the impact on employment will be comparatively mild. “especially when viewed against the up economic and labour market conditions” . Shying off from noticing on concerns that employers would get down cutting back on employee benefits to countervail additions in costs due to the new pay. Cheung urged employers to “communicate closely with their employees. peculiarly to hold blunt treatments [ and to ] work together” .

Trade unionist lawgiver Lee Cheuk-yan said he was disappointed with the rate stating it will be based on figures two old ages old before its execution. adding HK $ 28 an hr was non plenty to supply for a household. He favored the HK $ 33 an hr rate supported by employee groups. Commission chairwoman Teresa Cheng Yeuk-wah said the committee does non believe a HK $ 33 hourly rate was sustainable. She noted. half the load would eat into company net incomes while the figure of companies falling into the ruddy would travel up by 60 per centum.

She added those companies employed 120. 000 workers. Providing lawgiver Tommy Cheung Yu-yan said the new pay would be hard for smaller operators to bear. naming for authorities alleviation such as the release of licences fees for one twelvemonth and subsidies ( RTTNews ) – Hong Kong will implement its first minimal pay rate. set at HK $ 28 per hr. from following twelvemonth. the Secretary for Labor and Welfare Matthew Cheung Kin-chung said Wednesday.

The initial statutory minimal pay rate at 3. 61 per hr in U. S dollar footings will come into force on May 1. 2011. The rate was higher than that demanded by concern. and less than the HK $ 33 favored by trade brotherhoods. Cheung said that the statutory minimal pay. which is wholly new to Hong Kong. is intended to protect grassroots workers and guarantee that the wage that they get is commensurate with the hours worked. Sing the pay rate. Chief Executive Donald Tsang said that it has been a topic of contention and it is besides a milepost in our protection of the rights of low-income workers.

The minimal pay regulation notice 2010 will be published in the Gazette on November 12 and tabled at the Legislative Council on November 17. About 314. 600 or 11. 3 % of Hong Kong’s employees will be effected by the alteration. with 61. 4 % being adult females staff. 25. 3 % employees aged 55 and above. and 18. 8 % parttime workers. the government’s information service section said. In July. Hong Kong’s Legislative Council passed the Minimum Wage Bill without qualifying the existent pay and thenceforth formed a commission to put the minimal rate.


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