21 July 2010

Minimum wage?

Before the LegCo summer recess, a controversial bill of minimum wage had passed last week. The Economist also reported this with a title "End of an experiment", an experiment as Milton Friedman once described "the world’s greatest experiment in laissez-faire capitalism." But obviously, laissez-faire capitalism is not helping our people in this twisted small economy, or simply this Village is no longer a true laissez-faire capitalism economy.

This law intends to protect workers from being enslaved by working 12hrs or more a day, 7 days a week (yes, labours are supposed to have 1 day off after 7 days work by law, but still they are working non-stop for a month) earning just $3000-$4000 a month. Such low salary may be unbelieveable, ask any street cleaner you come across or security guard at your building, they will tell you the truth.

However, can minimum wage alone improve their living? I do agree on protecting anyone's basic living, this is the right everyone has. Is minimum wage the straightforward solution to end proverty? NO WAY! First of all, those receiving low salary are unskilled, old, and with low mobility. They simply have NO bargaining power against the employers and fewer alternatives, as Hong Kong is a one-dimenional economy dominated by property tycoons and the financial industry. Secondly, the wage level is essential. If it's too high, employers may go for more capable and productive workers and the existing workers may lose their jobs. If it's too low, it defeats the purpose of protecting basic income. Thirdly, any legislation process always lags behind the situation, the wage level will always be either too high or too low.

I am not against the idea of social protection to the low income people or the less capable. The problem here in the Village now is that the economy is so twisted, small medium enterprises (SMEs) have very difficult time doing their businesses due to high rent (high land and property price). Big enterprises control most of the supply chains and they have all the say on goods price setting. Can you imagine the profit of selling an estate (a few blocks) can be higher than the annual profit of a major airline? The margin can be as high as 50%. As I said previously, tycoons come here to slaughter the goose that laid golden eggs and leave us with some goose shits; or like a swarm of locusts, they come, eat and leave.

Hope the Village's government can do more on improving our villagers' living; social protection is one thing, there are many more here who do not necessary fall into the protection nest but are still suffering from the tycoons' torture. Like yours truly and my fellas in the Pub.

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