Hong Kong is set to raise the statutory minimum wage from HK$40 to HK$42.10 per hour in May, but an anti-poverty group has said the new rate still fails to meet “basic living needs.”
A woman pushes a trolley full of cardboard boxes in Hong Kong. File: Kyle Lam/HKFP.
The Hong Kong government announced on Tuesday that it would adopt the Minimum Wage Commission’s recommendation to increase the hourly base pay by 5.25 per cent. The new rate will take effect on May 1, subject to the approval of the legislature.
Priscilla Wong, chairperson of the commission, said the proposed hike could prevent excessively low wages and reduce the loss of low-paying jobs, while taking into account the need to sustain the city’s economic growth and competitiveness.
“We earnestly hope that the new [statutory minimum wage] rate will be accepted by the Legislative Council,” Wong said in a press release.
Hong Kong first introduced the statutory minimum wage in 2011. It was last adjusted in 2023 after a four-year freeze.
The Society for Community Organization (SoCO) told HKFP on Tuesday that while they welcomed the latest proposed rate, it was “far below” the hourly wage of HK$53.40 the group had suggested.
Sze Lai-shan, deputy director of SoCO, said the anti-poverty NGO had called on the authorities to take into account the city’s median salary when deciding on the minimum pay, saying the base wage should also reflect the projected inflation, she said.
“It is certainly better to have [a raise] than not, but the [proposed rate] remains below the level of meeting basic living needs,” Sze said in Cantonese.
Oxfam Hong Kong has advocated for employers in Hong Kong to adopt a “living wage,” referring to a salary that allows the employees and their family members to meet their basic needs and live a decent life. In 2024, the city’s living wage was set at HK$61.50 per hour.
Asked to comment on the gap between the living wage and the city’s proposed hourly base salary, Oxfam said the government should “lead by example” by paying outsourced workers a living wage.
“This level should be announced annually to encourage all employers to follow suit,” the NGO said.
A man holds cardboard boxes in Hong Kong. File photo: Kyle Lam/HKFP.
According to the commission’s 2024 Report on Reviewing the Statutory Minimum Wage Rate, the HK$2.10 increase would benefit some low-income employees, while the overall impacts on the costs of enterprises, unemployment rate and inflation would be “relatively mild.”
It estimated that enterprises from all sectors would see a combined additional wage bill of around HK$260 million to HK$350 million due to the proposed raise. The impact would be more significant on sectors that hire more low-paying staff, the commission said.
According to the commission’s forecast, the new minimum wage may increase the number of unemployed grassroots workers by around 600 to 900. The city’s overall unemployment rate, which stood at 3.1 per cent as of Tuesday, would rise by 0.02 percentage points.
The government said on Tuesday that it would table the amendment to the Minimum Wage Ordinance at the Legislative Council on Friday.
