Sharing Prosperity and Combating Inflation 7% pay rise next year, proposed by the HKCTU

In early November 2013, the Employers' Federation of Hong Kong recommended employers to offer a pay rise of 4% in 2014. The media and some commentators focused in praising the recommendation, as for the first time, is close to the estimated inflation. Indeed, the wages increase recommendations the Employers' Federation made in the previous years, have clearly reflected that the Hong Kong employers would deliberately exclude the working class to share prosperity. Worse than that, the often below-inflation pay rises caused many to suffer from a fall of living standard.

Unenthusiastic estimation to maximize corporates' gain

Each year, the Employers' Federation would quote numerous excuses, recommending corporates to hand out paychecks with caution. As a result, the overall economic growth of the past decade has been over 40% while the actual wages increase of the workers is 1%. In other words, the corporates have taken all the pies and left the workers the crumbs, if there was any left!


Relax, 7% pay rise won't stir trouble up

The HKCTU has always been advocated that the pay rise should not only be covering inflation, but also to repay workers for their contribution to economic growth. For many institutes and corporates with astronomical profits, a 7% pay rise is just a peanut and they can handle it with ease.


Constructive negotiation is the key

7% is simply a reference point, while each enterprise should determine their pay rise by looking into its accounts. For example, profitable enterprises are welcome to give higher than 7% pay rise. The key is, the employees and employers should discuss about it, to reach an agreement regarding pay rise, and other changes on their welfare.  


What justify a pay rise of 7%?

The goal of pay rise = economic growth + inflation

Economic growth in 2013: 3%

Estimated inflation of 2014: 3.8%

Thus, the HKCTU is calling for an average pay rise of 7% for workers in Hong Kong.


Booming future for construction workers: too rosy to be true

A few weeks ago, the media was covering stories of young bar-benders, between the age 20 and 30 and have had two years work experience, could have a wage hike from HKD15,000 to HKD60,000 per month. The Bar Bending Solidarity Union then issued a statement to clarify, saying that was not the reality of their trade.  According to the sectoral agreement reached between the union and the employers' association, a skilled bar-bender earns HKD1,448.5, which makes HKD36,212.5 if he workers 25 days a month. Yet, the environmental regulations which prohibit construction works on holidays, bad weathers and work arrangements often allow bar-benders to work at most 25 days, sometimes fewer. Construction Site Workers General Union Chairman Chan Pat-kan (picture above) explains that, there are various types of jobs in a construction site and the bar-benders are the only ones to have the right to regularly review and negotiate their income with the employers' association, due to their strike in 2007. Therefore, the bar-benders are the better-off employees at the construction site while the other construction workers constantly face “unjust” pay rise. For example, as a general construction worker, Chan himself used to earn HKD480 per day, including an overtime payment. In July 2013, his then employer announced a HKD100 pay rise but canceled the HKD50 overtime payment. It appears that his daily wages has gone up by HKD50 but the employers can cancel or deduct subsidy on any given day. Various construction workers unions, affiliated with the HKCTU, would give more details of their pay rise,  to respond to the exaggerated and twisted media coverage of their industry, as well to promote a reasonable sectoral wages and improve their working conditions.  


Case studies of the so-called pay rise

Media earlier has reported that an employer paid HKD20,000 and could not even find a dish-cleaner. Yet, the truth was, an employer was trying to outsource the dish-cleaning job for HKD20,000, for a whole restaurant. After deducting labour insurance and other costs, any contractor or any individual cannot pay more than HKD10,000 to a dish-cleaner (actually if it is a whole restaurant, it might need many dish-cleaners, so the pay is far lower than HKD10,000). The media also claimed that given the booming future of construction jobs, a new apprentice's daily income has gone up to HKD2,000.  However, statistics tell us that the unemployment rate of the construction sector is up at 5% to 6% and underemployment rate is among the highest in Hong Kong. The wages of the majority of construction workers are continuously being pressed down by developers and contractors. Let us introduce you some true stories of the so-called pay rise.

Social welfare organizations: unscrupulous use of fund

The general public might consider employees at the social welfare sector as the gifted employees, being paid well, on time and having a pay scale close to the civil servants. However, the picture has changed completely since 2000, when the Government started to give out funds in lump-sum grants, described by Social Welfare Organizations Employees Union's committee member Kwok Chung-yin (right). Once a fund is granted, the Government would not monitor how a social welfare organization uses it and surplus is often not shared with the employees. For example, the wages of the position “Program Worker” was set by the Government at HKD8,000 five years ago and no adjustment has been made since then, despite the ever-growing inflation. It means, no matter how hard a program worker works, s/he is earning less year after year.  The social workers also face the problem of unequal pay for equal work. They told Kwok that when they became social workers two years ago, the monthly salaries were HKD15,000 to HKD16,000. Now their pay has gone up to HKD17,000, which is the same as newly recruited social workers. In order to make the ends meet, social workers often change their jobs every few years, which means the organization would lose the expertise accumulated and need to invest time to rebuild a trusting relation with a new social worker, an unhealthy situation for all in the sector. Kwok urged the Government to review the lump-sum grant mechanism, to combat the problems of no pay rise and unequal pay for equal work. The social welfare organizations would need more supervision and actual wages should be an item of direct reimbursement, in order to ensure that funding specifically made for pay rise would be paid to workers at the sector.


MTR: Making over 10 billions of profits and infamous for pressing wages down

In 2012, the MTR has recorded over 13 billions profits and in mid-2013, it proposed wages increase at 2.2% to 6.5%, depending on an employee's performance. Chairman Chan Sin-wo of Mass Transit Railway Corporation Staff Union (middle) said the appraisal had five scores and close to a half of employees got three points, a pay rise of 4.5%. Only 10% of employees got five points for a 6.5% rise. “The pay rise was just catching up inflation, our years of service is not rewarded and we can't call it a pay rise.” Chan said. The union is lobbying MTR to reintroduce the pre-1998 measure, i.e. 3% pay rise for each year of service, instead of the current score system. For 2014, the union is seeking a not-lower-than-8% rise and expects MTR not only taking the wages evaluation reports of some 20 companies in the market, but to include inflation as a factor. The starting salaries of MTR's front-line workers are relatively low and therefore, to halt labour turnover, the enterprise has given some employees an extra 5% pay rise. “The new drivers earn a bit over HKD10,000 and 5% means 500 to 600 bucks more. It simply doesn't help.” Chan believes that the MTR should raise the starting salaries for its front-line employees to stop them from leaving.

Four steps to fight for pay rise

To get money out of the employers' pocket, it requires solid and well-planned strategies. Based on our affiliates' experience over the years, we have come up with a four-step strategy, namely 1. consultation, 2. raising demands, 3. confrontation and 4. negotiation. We are looking forward to seeing our unions practicing this four-step strategy in the coming wave of wage negotiation, and hope for fruitful negotiations for our members.


1. Consultation

Discuss your expectation on pay rise with union members and colleagues. Collect necessary materials such as the company's turnover, inflation and other relevant statistics. Form a united and determined team.


2. Raising demands

If the employer ignores your demand of pay rise, the trade union should organize for resistance. It should lobby members, seek media attention to get the juicy story of “profit-making business refusing to reward employees” out, and give a final warning.


3. Confrontation

Lobby member to pressurize the employer to negotiate with the trade union. The form and scale of confrontation rely highly on the solidarity level of members. Common tactics are general meting, joint-petition, protests, certain industrial actions or even strike.


4. Negotiation

Get your head on straight at negotiation. Give convincing statistics and reasoning at the negotiation table. If your employer turns your demand down or makes excuses, organize and take action again! It can be a process of fighting, negotiating and fighting, which goes on till you get the employer to take your proposal or reach a compromise that is generally accepted by the employees.