Surviving is Not Living: Defending the Dignity of Workers with Living Wage

Towards the end of last year, the Oxfam has put forward the suggestion of a living wage. Different from the statutory minimum wage, the living wage put forward by Oxfam calls on the government, public sectors, non-government organizations and private companies to pay their employers wages that reflects the actual needs of living. The Oxfam urges employers to participate and assume social responsibilities on a voluntary basis, while the implementation of living wage is to be monitored by a Living Wage Foundation. 

Researched and conducted by Dr. Wong Hung, the Hong Kong Living Wage Report proposed for the living wage is to be set at $54.7, based on food, housing and other necessary expenses. Advocating for the concept of living wage, The Living Wage Hong Kong Alliance was also established, aiming to introduce the concept to various industries and communities. 

What is living wage?

A living wage refers to the ability of a worker to provide a decent standard of living to his/her family, including proper and nutritional food, reasonable living spaces, basic education needs and medical expenses. Although the minimum wage was implemented in 2011, the minimum wage rates in Hong Kong proved to be insufficient in supporting the livelihood of individuals. In response, The Oxfam published the Hong Kong Living Wage Report. Based on a full-time employee working 26 full-days per month, 8 hours per day, the report calculates the living wage of Hong Kong to $54.7

Lives improved by raise in wages

To grassroots workers, a living wage will effectively raise standards of living: cases of workers living in sub-divided flats unable to afford buying refrigerators or air-conditioners are not unheard -- let alone going to theme parks during holidays. In the long run, living wage is potentially capable to resolving intergenerational poverty, allocating resources to the education of children. 

Lan, a single mom used to work as a waitress for $36 an hour, had recently switched jobs to work at an electrical appliances store close to where she lived for $39 an hour; hoping that by working closer to home will allow her with more time to take care her children. After the change, she can now do grocery shopping during lunch time, and afford better meals saved from traveling expenses. “Mom, can we perhaps go travelling abroad some time?”  Seeing his classmates going abroad for vacations every now and then, Lan’s son once asked her if it is possible for them to go on vacation as well. Lan’s biggest wish is to travel abroad with her son – he has never been on a plane before. To Lan however, her son’s question proved to be one difficult question to answer. A living wage will raise Lan’s pay by more than $2000. “I cannot even imagine it”, Lan said jokingly. Should the living wage be implemented, Lan wish to save half of the pay rise, hoping to be able to travel abroad with her son in two to three year’s time.

Living wage is not a scourge 

Since the beginning of The Living Wage Campaign in 2001, more the 4300 employers acrossed the UK had adopted living wages. With reference to foreign experiences, living wages is not something to be feared as ferocious—it is becoming increasingly acknowledged by companies and corporations. Football clubs of the English Premier League including Liverpool, Chelsea, Everton and West Ham United, for example, are all employers paying their employees living wages, outspokenly supporting living wages. As once said by Karren Brady, Vice Chairperson of West Ham United: “The club is more than the 11 players you see on the ptich… We acknowledge the contribution of each and every one of our staff. A very important part of this acknowledgment comes in the form of living wages. This keeps our manpower stable. Making the right choice to pay our staff living wages makes us proud.” Other than the Premier League, international brands such as HSBC, IKEA, Burberry, Nestle and Watson’s are all supporters of living wages overseas. 

Non-government organization London Citizens protesting at a stadium, demanding football clubs to pay workers living wage 

Government rejecting demands, Shrinking protection

The implementation of the minimum wage is a milestone in striving for the dignity of labour. Unfortunately, the Hong Kong Government continues to brush off calls for social policies improving, causing the number of workers as well as the purchasing power of the workers protected by minimum wage are both constantly diminishing. Since its implementation in 2011, the government rejected demands for annual review the minimum wage level—the current bi-annual review of minimum wage renders wage rate incapable of meeting inflation rates. The number of people benefitting from the minimum wage, by trend, is significantly decreasing: from 6.4% of the working population in the first year of implementation to only 1.4% in 2015. Ironically, the purchasing power of minimum wage had reverted to what it was 8 years ago. The purchasing power of the current minimum wage level is only equivalent to $26.6 in 2011 terms, which is even lower than the $28 minimum wage level at the time. 

Instead of considering the “aggregate economic conditions”, “labour market conditions”, “competitiveness” and “social inclusion’ which plainly neglects the needs of workers, the HKCTU and other members of the civil society have long been suggesting for the minimum wage to take into consideration factors contributing to basic needs of individuals. 

Government’s Smokescreen: Minimum wage and per capita GNP

The HKCTU has been constantly questioning the rationale of minimum wages. Explanations provided by the government claimed the minimum wage levle is equivalent to roughly 50 to 55% of the median wage in Hong Kong, claiming it to be on the high side as compared to other countries. In reality, the percentage share of employees remuneration in GDP is significantly disproportional; the minimum wage in proportion to per capita gross national product (per capita GNP) is steadily declining: the ratio has gone down from 21.3% in 2011 to 20.3% in 2017 (See fig.).

As a matter of fact, the enormous wage disparity suppresses the median wage significantly, hence, raising the ratio of minimum wage to the median wage. In other words, even if minimum wage amounts to half of the median wage, it doesn't alter the fact that overall wages in Hong Kong remain on the low side. In comparison to other regions (Fig 2), the percentage share of minimum wage in New Zealand, France and UK to per capita GNP is at 54.9%, 50.6% and 45% respectively—at least a double of what Hong Kong’s. Even when compared to other region within Asia, Hong Kong is still far behind countries such as South Korea (38%) and Japan (35%). (See Fig 3)