Minimum-Wage Debate Divides Hong Kong

In response to growing public calls to tackle the widening wealth gap, lawmakers passed the minimum-wage bill after a 41-hour session in July. Some of Hong Kong's lowest-paid workers, such as toilet cleaners or security guards, earn as little as HK$20, or about US$2.60, an hour. A Provisional Minimum Wage Committee appointed by the government has yet to recommend a new the hourly rate. HK$28 per hour is the median between what labor representatives and business groups are calling for.

A dispute between labor groups and the business sector last week raised the question of whether a minimum wage might backfire more directly against the workers it is meant to help. Trade unions called for a boycott of one of the city's largest fast-food groups, Café de Coral Holdings Ltd., which operates restaurants in Hong Kong as well as the Manchu Wok chain in North America (Steger).

While the minimum-wage law has yet to take effect, Café de Coral last month acted pre-emptively by increasing hourly pay by between HK$2 and HK$3.50 (Steger). However, because the company eliminated a paid 45-minute paid daily lunch break, the move turned into a public-relations fiasco. Employees found out their original earning of $22 an hour would end up being less less each month if they worked eight hours a day, 26 days a month. The boycott plan soon followed.

Hong Kong Chief Executive Donald Tsang, addressed to business groups that the government was forced to legislate a minimum wage after a "tepid" response from the business community to a voluntary plan for a minimum wage proposed in 2006 (Steger). "[T]ensions are developing in society because the fruits of the economic recovery have not trickled down to all levels of the community," said Mr. Tsang. "Some people feel that they are being ripped off" (Steger).

Workers will not only respond to low wages with boycotts; but it will also be reflected in their work ethic. If employees at restaurants are not working as hard this will directly affect customer satisfaction. Meals may not be prepared as quickly or there mite be less effort put into making them. If the workers got paid normal wages all the disputes between employee and employer will be settled and the consumer will be happy.

http://online.wsj.com/article/SB10001424052748704737504575601832288088158.html