Minimum wage is the least we can do for overworked low-income earners

November 28, 201411:01 am269 views
Minimum wage is the least we can do for overworked low-income earners
Minimum wage is the least we can do for overworked low-income earners

The national minimum wage has reduced symptoms of depression in low-wage workers in Britain, according to a research report for the 7th European Public Health Conference this month.

In 1999, the country legislated for a national minimum wage, set at £3.60 [HK$44.90 at the time] an hour. It then studied 7,681 individuals over time, comparing the health effects of income gains on people whose salaries rose to the minimum wage with those of otherwise similar workers who were unaffected because either their incomes were equal to or above the eligibility threshold or their firms were non-compliant despite paying wages below the threshold. The first group experienced significantly greater improvements in mental health. They also had, on average, lower likelihoods of self-harm and anxiety. There was no change in blood pressure, hearing ability or smoking rate.

At the University of Hong Kong, our poverty research also found districts whose average income was in the bottom 20 per cent of the citywide range experience mortality levels 136 per cent higher than those in the top 20 per cent. Poverty is indeed related to health problems, self-harm, premature death and domestic violence.

In May 2011, after years of debate, Hong Kong introduced a minimum wage of HK$28 per hour, calculated based on the average income of some 189,000 workers.

Two years later, last year, the Minimum Wage Commission raised the level to HK$30. That amounts to US$3.87, a figure among the lowest in developed societies including Australia (US$14.39), New Zealand (US$11.17), Britain (US$10.23), Canada (US$9.77) and the United States (US$7.25). However, Hong Kong ranks among the higher strata of gross domestic product internationally. In terms of per-capita GDP, it is on a par with the United States and Switzerland, when we account for purchasing power, as the World Bank does in its global ranking. And it surpasses New Zealand and Britain in terms of per-capita annual income adjusted for purchasing power.

Is our standard of living close to Switzerland or the US? Despite impressive economic growth in the past decade, people have not shared in the gains proportional to the city’s growth. Our low-income earners still work long hours to meet their basic needs.

Our minimum wage has helped narrow the income gap. The increased unemployment businesses predicted due to the higher pay has not come to pass.

Since 2011, our employment statistics have been strong, with a jobless rate of 3 per cent. However, the rate of increase in the cost of living has offset potential gains from the wage rise to improve the quality of living. There are still many working poor in our community.

There have also been concerns that higher production costs would make the city less competitive. However, competitiveness simply cannot be achieved at the expense of low-wage workers. What about our investments in skills and technology? Local labour has paid a relatively high social cost that has never been taken into account properly in our equation to maintain profit growth.

In order to reduce tension and promote a harmonious society, it is time we re-examined the core values of our community, empowered one another and came up with a win-win solution rather than a winner-takes-all scenario for Hong Kong.

Paul Yip Siu-fai is a professor at the University of Hong Kong’s department of social work and social administration.


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