Hong Kong is a capitalist’s dream, with one of the world’s lowest levels of corporation tax, at just 16%, and an administration that refuses even to utter the term ‘welfare state’. Yet despite alleged economic ‘good times’ – GDP growth was 6.3 per cent last year – over a quarter of Hong Kong’s workforce is stuck in low-paid jobs with salaries lower in real terms than a decade ago.
By Li He at chinaworker.info

The Hong Kong Confederation of Trade Unions reports that most low-skilled workers make only about HK$5000 a month, many working 10 hours or more a day, six days a week. Meanwhile housing rents are among the most expensive in the world. With the inflation rate now topping 9.5 percent, a determined fight-back is needed from the trade unions for real pay increases and behind the demand for a statutory minimum wage at a level people can live on. Last year’s (anonymous) top salary earner reported an income of HK$400 million according to South China Morning Post (10 May 2008). Compare this to the city’s 240,000 migrant workers whose salaries have not even been restored to their 1998 level of HK$3,860!

As Rex Verona of the Asian Migrant Centre pointed out, “At least 42 percent of Indonesians and and 61 percent of Nepalis earn HK$1,500 to HK$2,500 a month and thousands are denied their statutory rest days.”

Migrant workers makes a huge contribution to Hong Kong’s GDP – especially by carrying the burden of elderly and childcare which the state refuses to provide. These mostly women workers are at the bottom of the pile, but they are not alone! Hundreds of thousands of service sector jobs in Hong Kong pay less today in real terms than before the Asian crisis of 1997. Not a comforting thought with a new global economic storm looming!

The facts about poverty in Hong Kong are shocking:

* The poverty rate has risen from 14.8% in 1995 to 17.7% in 2005
* One in every four children (24.9%) lives in a low-income household
* Those earning a monthly income of less than HK$6,000 has risen by 17% during the decade from 1996 to 2006
* The median income of the top 10 percent of Hong Kongers is 32.5 times that of the poorest 10 percent – one of the greatest gaps in the world!

Hong Kong’s unelected government is a government of and for the rich. If there was ever any doubt about this it was dispelled by the February budget. Armed with a record budget surplus, Financial Secretary John Tsang again refused to make any meaningful improvements for working class people, showering gifts instead on the wealthiest one-fifth of Hong Kongers. Giveaways in the form of tax rebates and higher allowances worth around HK$14.5 billion were awarded to the 400,000 top earners in the HK$300,000-HK$600,000 bracket.

By comparison, only HK$5 billion went to that half of the population that earn too little to pay tax, mainly in the form of one-off payments to social security and old age recipients and low-income public housing tenants. The government had already carried through a package of cuts in the profits tax and property rates reductions worth a combined HK$18 billion for the wealthy. Old age, Disability, and CSSA recipients had to make do with a one-off handout – worth just HK$1.2 billion – despite the ravages of inflation upon their miserable income levels. 11 percent of Hong Kong’s children live in families dependent on CSSA payments.

This millionaire’s government has done its utmost to avoid legislation for a statutory minimum wage. It launched the misnamed Wage Protection Movement to get bosses to raise the lowest salaries on a ‘voluntary’ basis. It speaks about the need to ‘educate’ employers rather than compel them through the law. Anyone who needs to be ‘educated’ about the impossibility of living on less than HK$6,000-a-month shouldn’t be running an economic concern in the first place! A number of Hong Kong’s tycoons are now coming round to the idea of a statutory minimum wage but seek to set the level so low it will not make a fundamental difference.

This is a crucial issue facing all workers in Hong Kong – in the private and public sectors, migrants and others. A struggle for a decent minimum wage needs to be waged alongside a struggle for full compensation for the effects of inflation and especially rocketing food prices. By raising the ‘floor’ underneath the most exploited sections, we can make it harder for employers to undercut the wages of other groups of workers.

Tycoons applaud authoritarian rule

Li Ka-shing, Hong Kong’s ’chiu yan’ (Superman) is one of the richest men in Asia, with a personal fortune estimated at HK$23 billion. According to a new book by US author Joe Studwell, Li’s fortune is thanks not to market “savvy” but to government patronage and monopolistic protection under the former British colonial regime. Li’s Hutchison corporation long ago secured undisputed control of the heavily regulated Hong Kong Port, one of the world’s busiest, where “container terminal handling charges are also the highest in the world, despite labour costs far below those in countries with comparable GDP per capita,” the author writes.

Another tycoon, Stanley Ho, whose fortune is a more modest HK$7 billion, is often described as “self made”. Again, this is a myth. For decades under the former Portuguese rulers, Ho succeeded in capturing Macau’s only gambling license – he enjoyed a private monopoly. Ho is a prominent opponent of democracy in Hong Kong, paying for newspaper advertisements in 2005 to oppose demonstrations for universal suffrage. It is these tycoons whose interests are served by the unelected Hong Kong government and its masters in Beijing. Rather than democracy, capitalists like Ho and Li thrive on authoritarian capitalism.