Hong Kong’s Minimum Wage: What Impact on Jobs and Pay?

Ominous predictions of a tide of restaurant closings and job loss in Hong Kong after the implementation of a wage floor had fallen flat.

In August 2011, three months after Hong Kong’s Statutory Minimum Wage (SMW) took effect, restaurant operators lamented a shortage of workers. Some had to pay an hourly wage of 30 to 50 Hong Kong dollars, above the wage floor of 28 Hong Kong dollars, to hire dishwashers, kitchen helpers and servers. Despite higher overheads, the number of eateries grew by 500 to 15,000 from the end of 2010 to August 2011. The expansion of fast food conglomerates, in particular, was the most evident. Greater number of vacancies in the industry, moreover, saw fewer takers – on average, there was only one applicant for every three to four job openings.

It seems clear now that industry players’ earlier claims of operational difficulties had been exaggerated in a bid to forestall the SMW’s implementation in May 2011, no mean feat in a city which had long prided itself as the last bastion of laissez-faire capitalism, where adherents and business interests fervently sounded dire warnings against a wage floor, averring that any government interference with market-determined wages would backfire and cost jobs.