Hong Kong approves minimum wage hike to S$4.80 per hour

HONG KONG - The government of Hong Kong has approved a 7 per cent rise in the city's minimum wage, lagging increases elsewhere in the region and drawing criticism from some who say it's not enough to help workers cope with costs in one of the world's most expensive cities.

The move will take hourly wages in the financial centre HK$2 higher to HK$30 (S$4.80) and take effect from May 1. The adjusted statutory minimum wage is set to benefit about 223,100 workers in the city.

Hong Kong, where residential and commercial property prices are among the highest in the world, introduced a minimum wage in May 2011.

"Prices of everything are rising. A two-dollar rise is just too little. Even three or four would be better," said a cleaning lady surnamed Wong, who is paid the minimum wage and was reluctant to give her full name.

Last October, the city's leader, Chief Executive Leung Chun-ying, singled out the re-emergence of cage homes - cramped wire mesh huts stacked on top of each other - as an issue that highlights the depth of poverty that exists alongside one of Asia's glittering financial centres.

The city's Gini coefficient, a measure of income inequality, was 0.537 in 2011 for all households, up from 0.533 in 2006, according to the latest income disparity report released in June 2012. A figure of 0 reflects complete equality and 1 inequality.

The high cost of living has caused great pain for blue-collar workers in the former British colony, where home prices climbed around 20 per cent in 2012, doubling from a trough in 2008 and driving the market beyond record 1997 levels.

The pay rise compares with the latest wage hike in Beijing in January of 11.1 per cent, the fourth rise in three years. The monthly minimum wage in the Chinese capital was raised to 1,400 yuan (S$278) from 800 yuan in early 2010.

Bolder moves can also be seen in Southeast Asia. Vietnam's prime minister signed a decree in December raising the country's minimum wage by 16 to 18 per cent, while an up to 35 per cent hike took effect in Thailand on Jan. 1.

Wealthier Singapore, where a widening gap between rich and poor is also a concern, does not have a minimum wage and has no plans to enact one.