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Position Paper to the Minimum Wage Commission on the review of the statutory minimum wage rate

The statutory minimum wage system has been in effect for more than a year since 1 May 2011. During the past year, there was no job loss or corporate bankruptcy as the commercial sector or economists had worried about. Instead, many jobs have been offered at levels above the minimum wage against the backdrop of continuous inflation. In our opinion, the current statutory minimum wage is too low at the current level of HK$28 and is insufficient to cover the basic living expenses of a family. In view of the continuous inflation at present, we require that the minimum wage level be adjusted to HK$35 next year, so as to relieve the pressure on the grassroots.

 

According to Article 3, C131 of the International Labour Conventions, the minimum wage level shall be determined by taking into consideration — apart from national practice and conditions, economic needs and development levels — the needs of workers and their families, including the cost of living. As the most fundamental social safety net, the payment level of Comprehensive Social Security Assistance (CSSA) can be used as a reference. According to the summary of 2011 Census published by the Census and Statistics Department, Hong Kong currently has around 7.07 million residents and 2.37 million households, with about 3.53 million people engaged in paid work.[1] It means each person in the labour force needs to support around two persons on average. A two-person family (with one adult carer and one child), for example, is entitled to a monthly amount of HK$6,840 as basic CSSA payment plus rent allowance (excluding other allowances).[2] And if the carer works for eight hours a day and 26 days a month, he/she should be paid at least HK$33 per hour in order to be on a par with the CSSA level. Besides, working outside the family involves additional expenses, including transportation and dining costs. And the minimum wage level will not be updated before May 2013. Considering the inflation level between now and May 2013 (with the basic inflation rate being 5.6% in March 2012), we believe that the minimum wage should be adjusted to at least HK$35 per hour in order to cover basic family expenses. If income from work is lower than the CSSA level,  employees still need to rely on social security to make ends meet even when they have full-time jobs. That not only goes against the legislative intent of the Minimum Wage Ordinance, but also fails to offer adequate incentives for people with low-income to enter the labour market.

 

We demand that the government consider the basic living standards of employees and their families when determining the minimum wage level, and that the government conduct annual reviews based on the latest statistics, so that the minimum wage level will not be  out of line with prices.

Media Enquiry

Ms Si-si Liu

Director

sisi.liu@womencentre.org.hk
(852) 2748 8101

Remark

[1] Census and Statistics Department, "Summary Results of the 2011 Population Census", February 2012, P.22, 61 & 65, available at: http://www.census2011.gov.hk/pdf/summary-results.pdf.
[2] Social Welfare Department, "A Guide to Comprehensive Social Security Assistance (online version)", P.14 & 17, February 2012, available at: http://www.swd.gov.hk/doc/social-sec/CSSAG0212c.pdf. (in Chinese)