Hk Is Bad for Minimum Wage

As the implementation of the legislated minimum wage law approaches, one major enterprise which ought to implement this new law is the SAR government. Government services such as maintenance of public toilets, care takers and security guards are often commissioned to outsourced contractors partly because it is cost-efficient. It turns out that workers employed by the government through these contractors would not receive minimum wage levels.

This was discovered by lawmaker Wong Kwok-hing who sent questionnaires to 32 of 79 government departments regarding employment conditions of outsourced workers. The study concluded that out of 30,286 outsourced workers, 15,672 received salary below the statutory HK$28 hourly wage effective May 1. Worse, most of these government agencies researched by Mr Wong were clueless as to whether these outsourced workers are provided with benefits like paid leave or meal breaks.

I wonder how businesses affected by this legislated minimum wage law, already grumbling over the potential financial impact it brings to the bottom line, would react to this apparent oversight by what many of us would consider as role model for private employers. But should the government conform to the minimum wage law, will it guarantee employment for all incumbents without exceeding allocated budget? Or will it only create a list of unemployed workers? One can speculate that the government’s budget surplus should solve the money problems.

But as officials who tried to be generous in extending the HK$6,000 to each adult permanent resident realized, it’s not that simple. The Food and Environmental Hygiene Department spent HK$1. 2 billion as wages for 11,574 outsourced workers for the current financial year. Of the total number of workers, almost 9,000 received minimum wage salary of HK$5,824, calculated at working eight hours a day for 26 days each month. The case of Leisure and Cultural Services Department is quite similar where 6,631 of 9,600 outsourced workers were paid below minimum wage level.

If we look closely at how much public servants are paid, from Chief Executive down to government commissioned gardeners, we can see a great disparity in pay scale. This is also quite similar to the social standing in the city where behind the fame and glamor of the ultra-rich class are the seemingly abandoned folks living on the edge, barely able to keep things going. If the government can do better in handling the welfare of its outsourced workers through better pay structure, it can tremendously help bridge the growing wealth gap.