What’s the point of the minimum wage consultation?

May 17th, 2012 atam Posted in Culture, Food, General | 1 Comment »

Another day, another restaurant closure.

Not because the staff now cost too much because of the minimum wage but, as everyone would have guessed, because of a greedy landlord.

If the consultation on whether or not to raise the minimum wage is merely a waste of time, that’d be bad enough, but it’s worse because it skirts the fundamental cause of the wealth gap in Hong Kong.

Society has argued over the minimum wage for a long time but if we look at the people pitched against each other we’d see it’s not as simple as labour vs the capitalists. Rather, it’s low-income earners against small-to-medium-sized enterprises that can only keep costs down by squeezing workers’ wages, since they don’t have any leverage with the landlords and developers whose properties they occupy.

If the minimum wage stays at the existing level, SMEs have a better chance of survival; if it goes up, workers get a better pay packet but more SMEs will be forced to close shop. Either way, the landlords/developers make a bucket. Effectively, they leech the wealth out of society and, as they get richer and more powerful, condemn others to a struggle they blame on each other.

In many countries, local authorities have the power to approve or reject the establishment of certain businesses they deem detrimental to their communities. Thus, local councils in the UK have rejected plans by supermarket chains to take over sites occupied by local shops. In India, determined lobbying by small retailers has forced the national government to rethink plans to open itself to multinational retail giants – companies that typically have the money to meet the landlords/developers’ asking price in Hong Kong and drive mom-and-pop shops out of existence.

Why can’t Hong Kong’s communities have a say in whether or not the little shops and teahouses that have served them so well should be kicked out in favour of chain stores? To reject the idea as market intervention would be hypocrisy when district councils already have the right to turn down bus companies’ proposals to change routes. People don’t want the bus companies to raise their fares, and yet they can’t rationalise their routes to keep fares down because they can’t remove those that few passengers use. Ironies abound.

Someone’s going to argue that the bus companies provide a public service but shops and businesses are private businesses, but the minimum wage law is an acknowledgement that public interest is involved in the running of private businesses as the wage level concerns the public good. So does rent. If it isn’t regulated, the wealth gap will never be solved, whatever the incoming government does about housing.

One Response to “What’s the point of the minimum wage consultation?”

  1. > “If it isn’t regulated, the wealth gap will never be solved”

    But do the people with the power to solve it really want to?

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