Minimum Wage Policy on Hk Catering Industry

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Minimum Wage Policy in Hong Kong’s Catering Industry

The Minimum Wage Bill of Hong Kong was passed after 41 hours of debate on 15th July, 2010. As a crucial issue concerning labour market and economic development, the impacts of the policy are widely considered and debated in aspects of employment, industry and government. The catering industry, being labour-intensive and low-wage, stays in the spotlight of public discussion on minimum wage issues, which ranges from affirmative to opposing realms. The minimum wage policy should be implemented and will facilitate growth in the catering industry upon enforcement, considering the effects of maintaining industrial stability and promoting operational efficiency. The feasibility of the minimum wage policy is also proved by examples from Britain and the United States.

The low-wage situation of the catering industry can hinder development of the industry. In 2009 and 2010, the Real Wage Index of the catering industry ranks the lowest among other selected industries including manufacturing, import and export, transportation, financial activities and personal services (Census and Statistics Department of Hong Kong [CSDHK], 2010). With 1992 index being the basic point of 100, the average index of all selected industries is 113.9 in March 2010, while that of the catering industry is only 94.6. As for median hourly wage, workers in restaurants have a median wage of 32.7 dollars per hour, ranking the second lowest among all surveyed industries (CSDHK, 2009). The low wage situation will have negative impacts on industrial stability and efficiency. According to Kamal (2010), high rate of employee turnover will occur when low paid employees look for better 1

job opportunities with higher salaries. Kamal also points out that high turnover can trigger low productivity and efficiency. Hence, minimum wage policy should be implemented to improve the wage situation of the industry.

Higher level of stability and efficiency...
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