Is minimum wage law an ideal way to help the low income class?
Hong Kong’s minimum wage law was passed in 2010. A $28-hourly-wage floor was introduced to protect workers in Hong Kong.This has been viewed as a historical step to put a halt on the unfair practice in the capitalist economy and reward workers for their unremitting effort. The advocates of minimum wage law believe that it can enhance the living standard and protect the welfare of the underprivileged. Until now, the law has been in effect for one year, but the government admitted poor performance. This raises the question as to whether minimum wage law is an ideal way to help the low-income group.
When the minimum wage law was first introduced in Hong Kong, there were various conflicts in the society due to the ambiguity of the regulations ---- whether meal breaks and rest days are to be included in pay calculations. This is the first obstacle that the government faced when enacting the law. Even when this problem has been solved, there are still other difficulties because there are some loopholes in this law. The major one is how cleaning workers should be defined. As cleaning workers are protected under the minimum wage law, some catering shops avoid employing cleaning workers by asking other employees to pick up some of the cleaning duties. Employers do such a practice so as to lower salary expense. Undoubtedly, it is hard to inspect due to the difficulty of implementing the law. Thus whether the law can really protect the low-income group is still dubious.
Apart from the implementation problem, the law will also bring about many side-effects. The largest problem of the law is that it will probably lead to inflation. Increasing the wage payment means increasing the operating cost. In order to maintain its profit margin, businesses are likely to shift this cost to consumers and thus raise the product price, causing an increase in general price level. As a result, the cost of living will be...