Introduction

Recently, starting from May 1, 2013, Hong Kong had issued an increase of the Statutory Minimum Wage (SMW) from $28 to $30. Setting SMW at an appropriate level is vital to striking the balance between the objectives of forestalling excessively low wages and minimising the loss of low-paid jobs, while sustaining Hong Kong’s economic growth and competitiveness ("2012 report of the minimum wage commission," 2012). To fulfil this aim, the government have decided to increase the minimum wage rate in order for the people receiving the low-paid jobs to have a more fair salary.

This paper will first discuss about the stakeholders that will be affected by the increase of the wage rates namely the workers earning the SMW rates, …show more content…

For example, an able-bodied adult aged under 60 will receive HK$2,070 if he does not have a family. When the government increased the SMW, the income of the working people will increase and the amount of people that would need the government subsidies to cover their living expenses can decrease. This way, the government can spend more expenditures on other aspects such as better education or housing for the poor.

Society This new legislation will also bring several impacts on the Hong Kong society as a whole. Firstly, it has been mentioned that the increase of the minimum wage rate of Hong Kong will lead to the increased cost of firms and ultimately the consumers. Since most of the goods that can be found locally is manufactured by workers working in a minimum wage, the increase of the SMW will most likely inflate most of the price for most goods. The general increase in the prices level will lead to inflation which brings negative impacts to the lower class part of Hong Kong. According to the Census and Statistics Department of Hong Kong, the inflation rate of Hong Kong was recorded at 4.30 percent in October of 2013 compared to October of 2012 ("Monthly report on," 2013). The increase of the Statutory Minimum Wage is a mere 7.14% since it was first released at May 1, 2011 while the inflationary pressures are roughly 4% annually.