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17 APR 2012

Poverty in the Hong Kong workforce, despite the minimum wage Oxfam survey reveals 70% of low income workers and their families have more income, but almost half live in deprivation

About 70 per cent of low income workers and their families earn more income and 42 per cent of Comprehensive Social Security Assistance (CSSA) recipients express incentives to quit the scheme and join the workforce since the Statutory Minimum Wage Ordinance was implemented on 1 May 2011, according to Oxfam’s latest survey. The Ordinance plays a positive role in social development, although Oxfam urges the Hong Kong SAR Government to review the Ordinance and its implementation annually in order to further assist workers living in poverty and deprivation.

The Survey noted a 40 per cent increase in the average hourly wage of respondents, from HK$20.9 to HK$29.1. However, some employers have reduced remuneration packages, deprived workers of paid rest days and paid meal breaks, and weakened the benefits that workers are supposed to be able to access with the Ordinance. In the Survey, 19.6 per cent of low income workers reported a decrease of their individual income, and 27.4 per cent a decrease of family income. Regarding overall family life, 59.5 per cent reported no improvement with the introduction of the Ordinance, while 28.3 per cent expressed slight improvement and 4.3 per cent said there was great improvement.

Despite the fact that about 70 per cent earn more income, about 40 per cent of low income workers and their families continue to live in deprivation. The degree of deprivation clearly fluctuated with the different hourly wage level. In the Survey, deprivation is defined as missing out on 3 or more essential items due to economic difficulties. In other words, a score of ‘3’ or more was considered to be deprived.  The deprivation was greater when the rate approached the current minimum wage level of HK$28, as reflected in the mean deprivation score of 3.26; at a higher hourly wage level of HK$32 or above, deprivation dropped to 2.42. Households with children faced higher levels of deprivation: the mean deprivation score for families with children aged 12 or below was 4.32.  

"While the income of some workers has improved since the implementation of the minimum wage, Oxfam urges more comprehensive action from the Hong Kong SAR Government to address poverty and deprivation in the workforce. Low income workers need to support whole families with their wages, and the level of deprivation is high. Oxfam urges the Government to consider employment support policies and to conduct an annual review of the minimum wage level,” said Wong Shek-hung, advocacy officer for Oxfam Hong Kong. 

The Government can also support CSSA recipients to join the workforce, such as revising the “disregarded earnings” system, set up a savings system, expand subsidised childcare, and explore the feasibility of tax credit programmes with reference to existing systems in Europe and the United States.

The initial minimum wage level of HK$28 per hour, the first of its kind in Hong Kong, came into effect on 1 May 2011. The level is below the CSSA level of HK$29.7 per hour.

The Survey, commissioned by Oxfam and conducted by Policy 21 Limited, aimed to explore the working and living situations of low income workers and their families before and after the Ordinance. The research was conducted in two phases, with 831 people interviewed from March to April 2011, and 520 people from November 2011 to January 2012. The overall response rate was 70 per cent. 

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About Oxfam

Oxfam is dedicated to fighting poverty and inequity worldwide. The international and independent development and humanitarian organisation tackles poverty in four main ways: sustainable development in poor communities, disaster relief, local and global advocacy, and education with Hong Kong youth. Established in Hong Kong in 1976, Oxfam Hong Kong is a founding member of Oxfam, an international confederation that has assisted poor people in 92 countries. Oxfam Hong Kong alone has supported poor people in over 70 countries/regions.