Analysis: Assessing the Impact of Hong Kong's 5.25% Minimum Wage Increase on Workers
Hong Kong's Minimum Wage Hike: What It Means for the Workforce
Witnessing a change, Hong Kong's lowest-paid workers saw a pay boost last Thursday, with the hourly minimum wage climbing from HK$40 to HK$42.10, following the Executive Council's approval.
Let's explore the 5.25% increase, the first since the new formula for adjusting the wage was enacted last year, and its implications for employees, such as cleaners and security guards.
How are minimum wage reviews handled in Hong Kong?
Since its inception in 2011, Hong Kong has conducted minimum wage reviews every two years. The wage was initially set at HK$28 an hour, and subsequent reviews have typically resulted in increases.
The first significant hike was in 2013, when the wage went up 7% to HK$30. The following review in 2015 saw an 8.3% increase to HK$32.50. In 2017, the government pushed the hourly rate to HK$34.50, marking a 6.2% rise.
The most substantial increase of 8.7% came in 2019, pushing the hourly wage floor up to HK$37.50. Despite the pandemic-induced four-year freeze, in 2023, the city's lowest-paid workers received a HK$2.50 per hour raise, representing about 6.7%.
However, the increase from HK$28 in 2011 to HK$40 in 2023 fell short of the 44.7% inflation experienced during that period.
(Note: Minimum wage figures beyond 2017 are not available in the provided sources, but the review frequency remains every two years unless changed by policy modifications.)
- In 2023, personal-finance for Hong Kong's lowest-paid workers saw a boost with the increase in minimum wage to HK$42.10, marking a 6.7% rise since the last review in 2021.
- The recent increase in minimum wage in Hong Kong's business sector indicates that the finance department has approved a hike of 5.25% for the city's lowest-paid workers.
- Prior to the 2023 increase, the last notable hike in minimum wage occurred in 2019, with a 8.7% increase to HK$37.50.
- With the new minimum wage formula in place, Finance experts will need to reevaluate their personal-finance projections to account for the anticipated wage hikes in the upcoming reviews.
