Motion Debate on "Minimum wage, standard working hours" (9 November 2005)

MR JAMES TIEN (in Cantonese): President, regarding the debates on minimum wage and maximum working hours, I have looked up last year's record for the details of the discussion and the comments made by other colleagues to see if they will come up with new ideas this year to prevent the debates in this Council from rehashing the old issues as commented by some colleagues.

Actually, there are hardly any new arguments. The arguments advanced by both sides are more or less the same as those last year. Probably because they look at the matter from a very narrow angle, Members representing the labour sector consider that the interests of wage earners can be protected through the imposition of a minimum wage. The business sector, on the contrary, has all along adopted a more macroscopic perspective which is similar to the position stated by Chairman David ELDON on behalf of the Hong Kong General Chamber of Commerce (HKGCC), as pointed out by Miss CHAN Yuen-han in moving her motion earlier. Of course, apart from being the incumbent Chairman of the HKGCC, Mr David ELDON was formerly Chairman of the Hongkong and Shanghai Banking Corporation Limited (HSBC). With a global portfolio covering dozens of countries, the HSBC operates like a foreign economy. Among these countries, some have a minimum wage, but some do not; likewise, some have GST, and some do not. Mr ELDON should have seen a great variety of economic models. Given his years of experience of working in the HSBC, many of us from the business sector believe he will have a more specific or unique view on these major policies.

Regarding the proposal of imposing a minimum wage in Hong Kong, can we simply say that proponents of the proposal are safeguarding the interest of workers and opponents are safeguarding the interest of employers, or directly-elected Members who support the proposal are safeguarding the interest of wage earners and functional constituency Members, particularly those from the commercial and industrial functional constituencies, who object to the proposal, are safeguarding the interest of the business sector? Not necessarily.

In my opinion, this issue should be examined from the angle of general interests. Hong Kong is different from many other places. Despite its extremely small size, it has a population of 7 million. Unlike such countries as the United States, where there are oilfields and agricultural land, and even mineral ores in certain areas, Hong Kong has no resources whatsoever. What we have is only a population of 7 million, with the vast majority of them being Chinese. They are either employees or employers. One of the reasons for the imposition of a minimum wage in the United States is that there are black people, considered to be ethnic minorities, in the country's population. But why does the unemployment rate of black Americans in the south remain at more than 10%, and why is the unemployment rate of young black Americans even higher than 30%? Despite the imposition of a minimum wage, why can the interest of employees in the United States still not be safeguarded?

Although it sounds like the interest of a small group of people in the lowest social stratum can be protected by a minimum wage, what I described earlier, for reasons unknown, has actually happened very often. Is the imposition of a minimum wage precisely the reason for some employers in the United States to hire a certain kind of people while excluding the young black Americans, who are considered to be ethnic minorities? Of course, these people will not starve to death for they may receive dole from their government. More than 90% of the population in Hong Kong are Chinese. The number of people of other ethnic groups is relatively small. Should a minimum wage be really imposed, the employers will choose the employees they prefer. Will they prefer new immigrants? I did raise a similar problem with new immigrants last year. One of the reasons might be linked to the daily quota of 150 for family reunion. As years go by, a large number of poorly-educated people have gained entry into Hong Kong. However, they can only take up jobs at the more elementary level. Their wages are also close to the minimum wage level of approximately $5,000 or $6,000.

Under such circumstances, why has our unemployment rate fallen from 6.7% last year to 5.5% at present? According to the information provided by the Government, during the period from July to September this year, our workforce reached a historical new height of 3.6 million, 100 000 more than last year. Will it be possible that the lowest stratum is subject to the most pressure because of the 100 000 additional job-seekers? I guess this might be relevant to a certain extent. However, I have also noticed that fewer and fewer people are coming to Hong Kong under the daily quota of 150 for family reunion. In other words, most of those who wish to come to Hong Kong have already done so. As the number of people coming to Hong Kong for family reunion will continue to fall in the next couple of years, the number of low-income earners entering the labour market will drop too. Should the unemployment rate continue to decline in the coming two years, the financial position of the low-income earners will definitely be improved.

I pointed out last year that when inflation rate exceeded 10% during the '90s, employees were, more often than not, given a pay rise in excess of 10%. However, they still complained that the pay increases were inadequate. With the unemployment rate standing between 2% and 3% at that time, all employees could choose employers they preferred. The situation at that time was most favourable for employees. Not only could they choose employers, they could always switch jobs when they found their pay rises not big enough. The present situation is still far from that - with our employment rate remaining at 5.5% and our economy growing at a rate of 4% to 5%, the room for pay increases is still limited. However, insofar as the business environment as a whole is concerned, enhancing our competitive edge to enable more job-seekers to choose employers would be far better than specifying a minimum wage.

I also raised a question last year as to why so many overseas places had imposed a minimum wage. From the angle of foreign capital, Hong Kong should question this idea too. While many overseas and Southeast Asian countries adopt a floating currency system, Hong Kong currency is linked with the US dollar. For foreign capital, therefore, a Hong Kong dollar minimum wage is no different to a US dollar minimum wage. For some countries, such as Indonesia, Malaysia, and so on, their currency values will fall when they start losing their competitive edge. Their minimum wages are actually constantly changing. Our hands and feet are somehow tied in this respect.

Actually, for an economy as a whole, a minimum wage has a bearing on both the employers and employees. Taxation and other welfare issues are involved as well. Although Honourable colleagues have expressed a lot of views today and the labour sector's arguments, from the overall philosophy of the business sector, are not groundless, the arguments put forward by this side are somehow more convincing. Thank you, President.