New Hong Kong Minimum Wage Law Makes Everyone Unhappy


bamboo scaffolding just doesn't seem like a great idea to me. But what do I know?

I've occasionally heard it said that any law where all parties are dissatisfied in a good law. But I'm skeptical. Consider Hong Kong's new minimum wage provision. BBC News reports that:

The agreed level—likely to raise the earnings of 11% of the working population—is unlikely to satisfy employers or workers.

The territory has never had a minimum wage before, but the BBC's basic reporting on the new rule (which is quite similar to the progression of the AFP wire story on the same subject) is a study in the contradictions of minimum wage laws in general.

The story suggests that the need for the law arose due to Hong Kong's "big wealth gap," which has "become wider in recent years due to a series of financial crises."

But at the very end of the piece, readers learn that the law will do nothing to address the most obvious gap between rich and poor in Hong Kong: It will not apply to "the tens of thousands of migrant workers from the Philippines and Indonesia who work here as domestic helpers."

Ironically, that exception means the Hong Kong minimum wage law is better for the poor in that territory than typical minimum wage rules like those in the U.S., precisely because it leaves workers willing to labor for very, very low pay—for their own reasons, good or bad—alone to negotiate their wages as they see fit. And that means would-be employers will likely dig deeper into this pocket of cheap labor rather than messing around with people to whom the minimum wage rules apply, minimizing the impact on the economy. But it would suck to be a Hong Kong-born, non-union construction worker once this law goes into effect, wouldn't it?

More on the dangers of the minimum wage here and here.