The Implementation of the Minimum Wage System in Hong Kong GROUP 4 Group Leader: Chiu Cheuk Hin (4) Group Members: Kwok Wai Fung (10), Lee Ka Ching (16), Ngan Ka Kee (22) Chu Hiu Lam (28), Shiu Wai Fun (34)

 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 Content

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 10 th 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

 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) The Minimum Wage in Japan

QUESTION

Reason (1): Worker-Oriented ∵ 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 ↑ Hong KongJapan Type of the citytraditional cityautomated city Influence of the Culture … rely on staffuse machines and technology

Reason (2): Not suitable for Automation 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 * SME=Small and median size enterprise( 中小 企 ) Hong Kong (SME)Japan(SME) The Company ScaleSmallerBigger The capitalSmallerBigger Work in automation X

Reason (3): Not suitable for Automation Hong KongJapan The area1095 sq. km sq.km The sizeSmallerLarger 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 Automation X

Reason (4): High Rent ∵ Limited Land + High Rent + Minimum wage ∴ HK SME cannot afford the increasing production cost  Unemployment Increases  End the business Hong KongJapan Area1095 sq. km sq.km SizeSmallerLarger Competitiveness( 競 爭力 )between different enterprise HigherLower The rentHigherLower

Reason (5): The culture Hong KongJapan Culture X Consumer tidy up after meal Consumer tidy up after meal So… Employ more labour X Provide Cleaning Services In some fast food shop : ∵ 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

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.” Advantages of minimum wage’s implementation Cheng Yiu Tong (National People's Congress.)

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 Advantages of minimum wage’s implementation

1.Lack of Manpower in Labour Force 2.↑ the selling price 3.Deprived right of employees 4.↓ the number of full-time jobs 5.↑ the unemployment of elderly Disadvantages of minimum wage’s implementation

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  Lack of manpower in labour force  Disadvantage(1) : Lack of Manpower in Labour Force

Example : Security guards VS cleaners  Workers will choose to work as security guards Disadvantage(1): Lack of Manpower in Labour Work Security GuardsCleaners Physical StrengthLessMore Work outdoors for a long timeX More ComfortablyX

Disadvantage (2): Increase of selling price ↑Productio n Cost Transfer to Customers ↑ Selling Price

Some unscrupulous( 無良 ) employers  save the company costs  minimize the workers’ meal period time / reduce staff working hours Disadvantage (3): Deprive the rights of employees

Disadvantage (4): Less full-time jobs Full-TimePart-Time Amount of MPF paid by employers MoreLess 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

With the same amount of wage  Employ different educated people.  Employ highly educated young people instead of the elders Disadvantage (5): Increase Unemployment of elderly

How to Optimize the Minimum Wage System in Hong Kong ?!

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 Method (1) : Set the Standard working hours ∴ The government should legislate this to protect the employees.

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 modern cities -Let Hong Kong to became a modern cities Method (2): Set Up A Foundation

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 (3): Increase the training programs

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 (4): Set Up Award Scheme

 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 Method (5): Increasing the construction of tall buildings

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