CATHOLIC NEWS OF THE WEEK . Saturday, 17 November 2018

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Minimum wage not destroying economy

  HONG KONG (UCAN) : The introduction of the Statutory Minimum Wage on May 1 this year has not spelled the end of business activity in the territory as the many of the doomsday prophets and scaremongers predicted.

The Labour Affairs Commission for Hong Kong diocese said in releasing the results of a study on business costing on August 17 that small and medium sized enterprises report that the minimum wage has not significantly increased operating expenses.

The study reveals that the main burdens businesses carry are high rents and price hikes in raw materials, which some small and medium business owners say can cause severe operational difficulties that can even lead to closure.

The survey was conducted in June and July this year. The commission interviewed bosses of 101 small and medium sized businesses covering 14 different kinds of enterprise. The survey sought to discover the impact of the minimum wage and other economic factors.

The commission found that more than 70 per cent of respondents do not think the minimum wage put undue pressure on operating costs and few said that they had laid-off workers after the new wage levels took effect.

According to 64.6 per cent of the respondents, rent accounts for more than 41 per cent of their operating cost, while only 14 per cent of bosses cited salaries as their largest expense. Several complained that rent increases had reached unreasonable levels.

Many caterers and wholesalers reported that price hikes in raw materials account for the major slice of their overheads.

Commission officer, Law Pei-shan, said that several owners of labour-intensive businesses, such as beauty parlours, hair salons, car repair shops and homes for elderly people, admitted they now have a higher wage bill after the minimum hourly rate of $28 came into effect, because they used to rely on low-paid workers.

Law called on the government to “reveal official data in relation to the implementation of the minimum wage as soon as possible to eliminate cynicism,” as much publicity has been given to negative claims concerning the minimum wage.

 

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