The government is set to raise the statutory minimum wage (SMW) to HK$37.5 per hour from the current HK$34.5.
The new SMW rate, proposed by the Minimum Wage Commission and approved on Tuesday by the Executive Council, will take effect from May 1, the Hong Kong Economic Journal reports.
The proposal came after members of the commission representing both the employers and the employees reached a consensus last year.
Hong Kong began implementing the SMW on May 1, 2011, when the rate was set at HK$28 per hour. The SMW rate was raised to HK$34.5 on May 1 last year.
Under the Minimum Wage Ordinance, the SMW rate must be reviewed once every two years.
Going up from HK$34.5 to HK$37.5 represents an increase of 8.7 percent, which is more than that seen in the past eight years, Apple Daily reported.
Based on 2017 data from the Census and Statistics Department, it is expected that as many as 156,800 workers will benefit from the rate increase, with those in property management, security and cleaning services, retail and catering seen gaining the most.
Dr. Dennis Ng Wang-pun, president of the Chinese Manufacturers’ Association of Hong Kong, called the latest adjustment acceptable, saying workers’ hourly wages in general are higher than the current SMW rate, according to Apple Daily.
However, Liberal Party leader Felix Chung Kwok-pan said he is worried Hong Kong’s small and medium-scale enterprises are likely to be under greater financial pressure as the 8.7 percent increase, the highest rate hike so far, is greater than the local inflation rate.
Hong Kong may see an economic downturn this year due to several external factors, and this could prompt enterprises to pass on to consumers the higher cost resulting from the new SMW rate, Chung said.
According to the government’s preliminary assessment, the latest SMW rate increase will only have a minor impact on inflation and unemployment.
Employers may see their wage cost go up by HK$700 million per year at most, the government said.
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