Minimum Wage To Rise By HK$2.5 Per Hour

Hong Kong's minimum wage is set to rise for the first time in four years, from HK$37.5 to HK$40 per hour.

The HK$2.5 increase was approved by the Chief Executive in Council on Tuesday and will come into force on May 1, once it has been endorsed by the Legislative Council.

The increase had been proposed by the government-appointed Minimum Wage Commission (MWC).

"The recommendation of the MWC has struck an appropriate balance between the objectives of forestalling excessively low wages and minimising the loss of low-paid jobs, while giving due regard to sustaining Hong Kong's economic growth and competitiveness," Secretary for Labour and Welfare Chris Sun said in a statement.

"The government accepts the recommendation of the MWC, and considers that the new rate will be conducive to the overall interest and development of Hong Kong."

The chairwoman of the commission, Priscilla Wong, said fewer workers are expected to benefit from this increase compared to the last one in 2019, because there are not as many people getting paid at the wage floor. 

An acting government economist, Desmond Hau, said the increase is expected to beat accumulated inflation since the last rise.

He noted that the extra HK$2.5 amounts to a 6.7 percent increase, while the accumulated inflation stood at 5.4 percent up until November last year.

The minimum wage is subject to a review every two years and was frozen in 2021 because of the poor state of the economy.

Some trade unions have been calling for an annual review and last year the government asked the commission for a report on the matter.

Wong said the MWC is looking at ways to improve the adjustment mechanism and will make an announcement if it comes up with anything.