Hong Kong’s government plans to raise minimum wages by 7% in May next year, the first increase since the introduction of lowest-wage laws, in a bid to help residents amid rising costs in the city where income disparity is among the world’s highest.
Minimum wages will climb to HK$30 ($3.90) an hour from HK$28 ($3.6) introduced last year by the government to “foster social harmony”. The hike will affect about 10% of the city’s workforce, or 330,000 workers, reports the Financial Times.
The increase is also aimed at assuaging concerns on the widening gap between rich and poor as house prices continue to soar.
UK-based charity Oxfam, along with several local community organizations, has called on the government to do more for the city’s poor as incomes for poorest 10% of the population had fallen 16% to HK$2,170 a month.
This comes as Hong Kong chief executive Chun-ying Leung signaled willingness to intervene more in the economy since taking office in July.
Secretary for labour and welfare Matthew Cheung said on Wednesday that the “income of low-paid employees had improved noticeably in real terms” since the minimum wage was introduced.
The increase will “help the grassroots layer of the labor force enjoy growth in actual wages,” says Raymond Yeung, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltd.