The Implementation of the
Minimum Wage System in
Hong Kong
GROUP 4
Group Leader:
Group Members:
Chiu Cheuk Hin (4)
Kwok Wai Fung (10), Lee Ka Ching (16), Ngan Ka Kee (22)
Chu Hiu Lam (28),
Shiu Wai Fun (34)
Content
 The Progress of the Implementation Minimum Wage in
Hong Kong
 Comparison of minimum wage between Japan and
Hong Kong
 Advantages of minimum wage
 Disadvantages of minimum wage
 Optimization of minimum wage system in Hong Kong
 Conclusion
The Progress of the Implementation
Minimum Wage in Hong Kong
2000 : Voice Out
 Set up a minimum wage
 Demanded by many people
 Protect Low-level worker’s income
The Progress of the Implementation
Minimum Wage in Hong Kong
2008: Wage Protection Movement
October 2008
 Launched by Labour Department
 Aimed to protect cleaners and security guards
 No satisfactory results Failed
 ↑ the demand of setting a minimum wage
The Progress of the Implementation
Minimum Wage in Hong Kong
2010: Proposed wage
10th November
 Proposed wage: HK$28 per hour rate
 By the Provisional Minimum Wage Commission
The Progress of the Implementation
Minimum Wage in Hong Kong
2011: Implementation of the minimum wage system
5 th January
• Legislative Council accepted the proposed wage
1 st May
• Started
• $28/hr
The Comparison of the Minimum
Wage in Hong Kong and Japan
The Minimum Wage in Japan
 What is the average minimum wage in Japan?
HKD72 (100HKD: 1000YEN)
 When it started?
1959
 Why it started?
The Japanese Government
 this program can help workers
with no fixed job (E.g. Site workers)
QUESTION
Reason (1):
Worker-Oriented
Hong Kong
Japan
Type of the city
traditional city
automated city
Influence of the
Culture …
rely on staff
use machines and
technology
∵ HK is a traditional city
worker-oriented
prefer using manpower than machines
Japan :
-No. of labour forces can be ↓ by using machines
-Machines provide higher efficient and productivity
reduce the production cost
∴ Wage can thus be ↑
Reason (2):
Not suitable for Automation
Hong Kong (SME)
Japan(SME)
The Company Scale
Smaller
Bigger
The capital
Smaller
Bigger
Work in
automation
X
* SME=Small and median size enterprise(中小
企)
Large investment
∵ The small capital of HK SME
∴ The investment on Automation(自動化) to HK’s SME is comparatively large
-The minimum wage already increase SME’s burden,
The costs will ↑> before
Reason (3):
Not suitable for Automation
Hong Kong
Japan
The area
1095 sq. km
29 751 sq.km
The size
Smaller
Larger
Automation
X
Not Enough Space
∵ The area and size of Hong Kong is smaller than that of Japan
∴ No extra land can be provide for automation in HK
Reason (4):
High Rent
∵
∴


Hong Kong
Japan
Area
1095 sq. km
29 751 sq.km
Size
Smaller
Larger
Competitiveness(競
爭力)between
different enterprise
Higher
Lower
The rent
Higher
Lower
Limited Land + High Rent + Minimum wage
HK SME cannot afford the increasing production cost
Unemployment Increases
End the business
Reason (5):
The culture
In some fast food shop :
Culture
Hong Kong
Japan
X Consumer tidy
Consumer tidy
up after meal
up after meal
So…
Employ more
labour
X Provide Cleaning
Services
∵ More services is needed to provided to Hong Kong customers
∴ More workers are needed
 ↑Production Cost
 The minimum wage in Hong Kong is lower than other countries
Advantages of minimum wage’s
implementation
Cheng Yiu Tong : “The minimum wage can make the life of the
primary attendant can be improved, and will not be insulting
wages, but also said the minimum wage of $28 is the dignity of
labor.”
Cheng Yiu Tong (National People's Congress.)
Advantages of minimum wage’s
implementation
1. Increase the motivation of low-wage workers
improve the efficiency and productivity
2. Protect the low-wage workers
a minimum standard of living
increase the purchasing power
3. Prevent the exploitation of workers with low
technical level
 Employers used to pay them a lower wage
Disadvantages of minimum wage’s
implementation
1.
2.
3.
4.
5.
Lack of Manpower in Labour Force
↑ the selling price
Deprived right of employees
↓ the number of full-time jobs
↑ the unemployment of elderly
Disadvantage(1) :
Lack of Manpower in Labour Force
The wages of many low-skilled jobs are the same as given
in the hourly rate of $ 28
 Workers will choose
1. a more comfortable working environment
2. less workload
Lack of manpower in labour force
Disadvantage(1) :
Lack of Manpower in Labour Force
Disadvantage(1):
Lack of Manpower in Labour Work
Example : Security guards VS cleaners
Physical Strength
Work outdoors
for a long time
More
Comfortably
Security Guards
Cleaners
Less
More
X
X
Workers will choose to work as security guards
Disadvantage (2):
Increase of selling price
↑Production
Cost
Transfer to
Customers
↑ Selling
Price
Disadvantage (3):
Deprive the rights of employees
Some unscrupulous(無良) employers
 save the company costs
minimize the workers’ meal period time /
reduce staff working hours
Disadvantage (4):
Less full-time jobs
Amount of MPF
paid by employers
Full-Time
Part-Time
More
Less
With the implementation, the production cost of the company
increases.
 Company needs to find another way to decrease the cost (e.g.
decrease the cost of MPF) so as to maintain the profit
 Employs less full-time jobs, but more part-time jobs
Disadvantage (5):
Increase Unemployment of elderly
With the same amount of wage
 Employ different educated people.
 Employ highly educated young people instead of the
elders
How to Optimize the Minimum
Wage System in Hong Kong ?!
Method (1) :
Set the Standard working hours
What is Standard Working Hours?!
- To make additional wage subsidies
Why have to set up?!
- Many workers work over time
- The company paid the overtime wages X
The Aim:
-To protect the employees
-Give the responsibility to the enterprise
to compensate overtime working
∴ The government should legislate this to protect the employees.
Method (2):
Set Up A Foundation
What is the foundation?!
-the government should provide funds to SME use
to buy the machines
Why have to set up ?!
-Encourage SME to buy some machines to replaced
some low skilled workers
The AIM:
-Reduce the low-skilled workers
-Let Hong Kong to became a modern cities
Method (3):
Increase the training programs
Who gave the training programs?!
-The Open University Of Hong Kong
-One Person One University (一人一大學)
Why have to increase?!
-Unemployment of elderly and low-skilled
workers is increase
The AIM:
-More elderly and low-skilled workers can find
more professional jobs
Method (4):
Set Up Award Scheme
What is the object of this scheme?
- manpower in labour work(E.g. Cleaners etc)
What is the award scheme?
 Legislate the employee benefits
 Legislate bonuses
Why have to set up?
- The lack of manpower in labour work is ↑
The AIM:
- Can attract the people will find some
manpower work
Method (5):
Increasing the construction of tall buildings
 limited land in HK
 tall building can be build to provide more spaces.
∴ Automation can be introduced.
can increase the efficiency of the production,
production cost thus decreases
A higher minimum wage can be introduced
Conclusion
 The purpose is good for low-wage worker
 Lower than other countries
But
 Government needs to listen the voice of
public
 The minimum wage system is needed to
optimize