Yan starts work every afternoon cleaning clams and washing minced garlic before the hungry crowds descend on her employer's popular Hong Kong seafood restaurant. The waitress, who grew up in a town in nearby Guangdong province on China's mainland, works into the early morning of the next day for little pay and few if any tips.
"Life is hard here," said Yan, which is not her real name. "At home, things were slower and I could have run a little restaurant." Yan is among hundreds of thousands working for pay sometimes as low as 2.75 US dollars an hour, supplying the money-obsessed city known for its billionaire tycoons and glittering skyscrapers with a massive pool of cheap labour.
But concern about a growing income gap - pegged as the world's biggest among wealthy economies by the UN Development Programme last year - prompted the government to introduce the city's first minimum wage, which is scheduled to come into effect in 2011. Now, business and union leaders are locked in a pitched battle over whether that wage should be as low as 3.10 US dollars or as high as 4.25 US dollars, still far below other international cities in Europe and North America.
"The debate on minimum wage in other countries happened 50 or a 100 years ago, but the free marketers here have always argued against it," said Lee Cheuk-yan, a legislator and head of the Confederation of Trade Unions, who organised a recent weekend wage protest that drew thousands of workers. "Internationally, free marketers will feel they lost the last champion of the free economy, but so what? Even if we lost that image, if people can still make a profit they will come here."
Lee said business is most concerned about whether a pay floor would open the door to maximum working hours and paid overtime, which don't exist in a city regularly credited with having the world's freest economy. "It is quite absurd - people can work 10, 12, 14 or even 16 hours a day without getting paid overtime," he told AFP.
But life may not get much better for the city's poorest citizens with job losses and rising food prices a likely consequence of the new pay law, said Terry Miller, director of the Center for International Trade and Economics at the Heritage Foundation, a conservative Washington-based think tank. The Foundation's annual list of free economies put Hong Kong at the top in 2009, the 16th year in a row, edging out regional rival Singapore.
"It is likely that the least skilled workers in the Hong Kong economy will be priced out of the labour market by the setting of a minimum wage," Miller told AFP in an email. The proposed wage's comparatively low level points to a decision that has little to do with economics, Miller added. "This is a clear indicator of a proposal that is essentially political rather than economic in nature," he said.
The controversial issue has filled newspaper pages for months, with the Hong Kong General Chamber of Commerce warning that a high minimum wage could mean 150,000 lost jobs, although it has since backed off its opposition to the law. Advocates accuse business of scaremongering, saying the new wage law would only impact a relatively small number of people in the city of seven million.
The latest census found that about 16.9 percent of the city's 2.78 million workers earned less than 33 Hong Kong dollars (4.25 US dollars) an hour, with about 130,000 taking home less than 24 Hong Kong dollars an hour. But a recent article in the daily South China Morning Post quoted James Wong, one of Hong Kong's thousands of small restaurant owners, as saying he'll have to hike the price for a bowl of noodles by more than one-third.
"If the waiters get 33 Hong Kong dollars, I will have to pay the chefs at least 40 Hong Kong dollars an hour, right? They can't be given the same salary because they are more skilled," he told the paper. "Imagine how many bowls of wonton noodles I will have to sell to cover that expense." Legislator Tommy Cheung issued a public apology for suggesting Hong Kong should start with a minimum wage equivalent to about 20 Hong Kong dollars, less than an average fast-food restaurant employee makes.
Rival lawmakers excoriated Cheung, with one protester in a pig-head mask tossing a 20 dollar bill at the beleaguered legislator's feet. Stanley Lau, chairman of the Federation of Hong Kong Industries, said his organisation "reluctantly" accepted the new law.
"The level of wages should go up and down," he said. "If the economy grows well, we'll need more employees and the wage level should be higher. If things go on a downturn, enterprises won't need as many workers and the wage level should be lower." However Asia's centre of free-wheeling capitalism will never have a pay floor on par with London, Paris or New York city, said Terence Chong, associate professor of economics at the Chinese University of Hong Kong.
"That's not going to happen," he added. Worries about a minimum wage driving up food prices and sparking job losses are valid, but the long-term damage would be minimal, he said. Sky-high rents - not wages - are more of a threat to small business in the densely populated city, Chong added. "I don't think it's the end of the world for business. It's the rent that is killing them, not wages." Several hundred thousand domestic workers, mostly from the Philippines and Indonesia, are likely to be excluded from the new law. Employers are already required to pay them a monthly wage of 3,580 Hong Kong dollars plus room and board.
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