LC Paper No. CB(2) 495/98-99(02)

(Summary Translation)

The Federation of Hong Kong & Kowloon Labour Unions (the "Federation") has written to express views on the Proposal for a Minimum Wage in Hong Kong.

The Federation points out that, according to an internationally authoritative report, Hong Kong ranks 14 among the 15 countries and regions with the worst record in terms of disparity between the rich and the poor. Although Hong Kong has the fifth highest GDP per capita in the world, 10% of its population own 41.8% of the wealth while 10% of the population with the lowest income share just 1.1% of the GDP among them, representing a nearly 40-fold difference between these two groups of people. A lack of bargaining power associated with a rising unemployment rate is subjecting those semi-skilled or non-skilled workers, who are already among the low income group, to further exploitation by employers in the form of reduced wages. This will weaken their purchasing power, which in turn will hinder a recovery in the local economy, widen the gap between the rich and the poor and ultimately pose a threat to social stability.

If a minimum wage system is adopted, the level of minimum wages should be set above the poverty line. This will ensure a decent life for workers and their families. As most employers are law-abiding, a minimum wage system will not harm them. On the contrary, it will be a deterrent to some unscrupulous employers.

Moreover, more than 80 countries in the world, including China, have ratified the International Labour Convention on recommendation concerning minimum wages. Even some of our neighbouring regions, such as Shenzhen, have adopted a minimum wage system. The Federation is therefore in agreement with the idea of a minimum wage system.

Nevertheless, as the actual wage levels in different trades and industries vary, an across-the-board minimum wage may not be suitable for some trades. The Federation is of the view that the reasonable wage level in a particular trade should be worked out between the employers and employees in that trade through consultation.