To Them That Hath

Two recent decisions by the government suggest to me that Bible reading study is still prevalent among the top echelon of our government. The first was the decision by the government, having regard to the findings of the Minimum Wage Commission, to freeze the statutory minimum wage at its present level of $37.50 per hour for a further two years. Thus, those who have been pegged at this level since 2019 face a further stretch until 2023 at the earliest before they will be eligible for an increase. The second was the decision that there was no case to introduce unemployment benefit even though the unemployment rate seems set to exceed seven per cent. To do so would “distort the relationship between employers and staff”.

Let us take these decisions one at a time. A person working 10 hours per day for 25 days per month at minimum wage would earn the princely sum of $9,375 which is barely enough for a single person to survive. An individual working only eight hours per day would be receiving just $7,500. It would certainly not be enough to carry a family of four with children at school. By coincidence, the amount payable to a family of four under the Comprehensive Social Security Assistance scheme would be $9,450. According to government figures, some 21,200 people (0.7% of the workforce) are on the minimum wage.

This is the first time since the system for setting a minimum wage was introduced in 2011 that there has been no adjustment. Union representatives on the Commission apparently wanted at least $39 per hour, while employer representatives were split between a freeze and a maximum of $38. In announcing the decision, minister for labour and welfare Dr Law Chi-kwong said there was a “majority consensus” (whatever that means) to stay put. The Commission considered that Hong Kong’s economy was in a deep recession and the unemployment rate remained high. There was also reference back to inflation rates since the scheme was introduced compared to previous adjustments.

Let me float a wild idea here: what if the starting rate 10 years ago should have been set at a much higher figure -- $40 anyone? – and should by now be up to $50. That would still amount to only $10,000 for 25 eight-hour working days per month.

Two arguments are sometimes advanced against more generous minimum wage levels. One is that a higher minimum would result in greater unemployment as employers would lay off some low wage staff, increase use of automation etc. In theory that might be true, but frankly at the levels we are talking about, any effect would be negligible. Besides, with the sort of low-end service jobs we are dealing with the scope for greater automation is strictly limited.

The second line of argument is an interesting circular one to the effect that the minimum is only a benchmark, and that most employees receive a premium to reflect their greater skill level and experience. So adjusting the minimum would in practice make little difference to most. The counter argument to that is if it would make no material difference for most, why not just do it to help those for whom it would make a difference. Here is another wild idea. How about we give those at the bottom a living wage, and squeeze the premium a little in paying those at higher levels.

There is a bigger picture here too of course. A typical restaurant has three main cost centres: food, staff and rent, with any surplus as profit. How about we pay the staff a little more and those rapacious landlords a little less?

But when we set aside all the hoopla and detailed calculations, there is another more basic factor to take into account: All work deserves its own dignity. The present minimum wage is undignified, it belittles us all.

Now for unemployment pay. Most advanced economies provide some temporary protection for employees when they are laid off. The reason is obvious. We live in a connected complex world. A person can suddenly be rendered unemployed for reasons totally beyond the individual’s control. One minute the family is paying its bills, maybe setting a little aside for a rainy day, the next the rug is pulled violently out and the whole house of cards is in peril. It is reasonable in such circumstances for society to provide a cushion for a period of time while the individual seeks new work. The CSSA scheme with its stringent means test is not a substitute. We should be working to preserve that family as a going concern.

How such a scheme should be funded (a payroll levy like MPF?), how long it should pay out to the individual (six months?) and how much ($9,000?) are all issues for another day. But we should surely be talking about such a scheme, not just dismissing the idea. Instead, we seem to be operating under a Dickensian assumption that all workers are shirkers at heart, that once such a scheme were introduced everyone would loaf around at home with their feet up watching daytime television. I don’t believe it.

There is a distortion in the relationship between employer and employees: in the existing set-up, the boss holds all the cards.

The biblical reference I had in mind comes from Matthew “For whosoever hath, to him shall be given, and he shall have more abundance, but whoever hath not, from him shall be taken away even that he hath”. Our ministers – each of whom earns more than $10,000 per day – should bear in mind that this quotation is an illustration of injustice. Not a desirable political strategy.