Print Version    Email to Friend
Is the ripple effect really a tsunami?

 

Hong Kong has seen a year of fear campaigns. There was the predicted migrant invasion and prophesied employment crisis resulting from a minimum wage, both, as it came out in the wash, based on unfounded information.

In the protracted battle over the minimum wage, the struggle of working people to negotiate something over $30 an hour was swamped in a deluge of doomsday predictions that the ripple effect would leave massive unemployment in its wake that could trigger the end of life as we know it.

However, by the time the spin doctors got through with their job, the ripple effect had become a full blown tsunami, somewhere in the magnitude of the Boxing Day 2004 disaster.

However, although the end result did not quite reach the magical $30 figure, six months into the experience surveys are telling us the wage increases have not had a big impact on business at all, but rising rents and inflation in the prices of goods have.

Many business live in fear of skyrocketing rents and have the daily sight of boarded up premises around them as a reminder that once thriving enterprises have fallen victim to demands for doubled and even tripled rental.

Strangely, it is the same owners of big properties jacking up the rents who warned of the pending disasters resulting from higher wages and better accountability in number of hours worked.

Is it feared that higher wages may leave less money to meet exorbitant rental levels?

But the ripple effect did succeed in distracting attention from issues related to the real areas of cost in running a business, be it small, medium or large.

Although the minimum wage is ostensibly a measure to give relief to the lowest paid sections in society, the furore did more to shift attention from the divide between the middle class and the elite to the tenuous dividing line between middle class and poor, than it did to relieve poverty.

This begs the question as to whether it was an economic concern or a class struggle, as a lost job in the middle class can be an express ticket to poverty.

However, while the purveyors of the ripple effect do rent the bulk of properties and supply the major percentage of goods coming into Hong Kong, they are not the big employers and nor are they particularly productive, rather, they profit on the productivity of other enterprises.

The recent financial collapse shows that unwarranted risk-taking had more to do with financial success than solid investment. However, when it fell apart, it was left to naïve investors and governments, in other words, the working people, to carry the can.

As the director for financial stability from the Bank of England quipped at the time, “If risk-taking was a value-added activity, Russian roulette players would contribute disproportionately to global welfare.”

But employment is not just about economic balance. It is people who are employed and they are entitled to a decent living standard, as well as time to nurture their social and family life, and pursue interests outside of work.

Minimum wage is only half the battle. The number of hours spent in service of the employer is still a contentious issue.

So, are the elite and entrepreneurs the big enemy of the working class? Maybe not, but their propaganda about employment and wages should be ignored. JiM