Hong Kong: HK$28 minimum wage – “an insult!”

Unionise fast food and other low pay sectors, launch a serious struggle for HK$33 (4.25 US-$) minimum

As expected the Hong Kong government has set the new minimum hourly wage at HK$28 (3.60 US-$), following the “advice” of its own, rigged, Provisional Minimum Wage Commission. Demands from unions, anti-poverty groups and tens of thousands of poorly paid workers have gone unheeded. Instead it was the crocodile tears of business tycoons and their political guard dogs such as Tommy Cheung Yu-yan, the notorious representative of the catering industry functional constituency, that caught the government’s ear with their claims they would be “ruined” by a minimum wage of HK$33 an hour. Once again, the great majority of people (six out of ten favour a minimum set at over 30 dollars) have been held to ransom by a privileged penny-pinching clique of capitalists.

“This decision is an insult! Exploitation and discrimination will continue as if nothing has changed,” said Filipino migrant worker T.K. Pastorfide. Migrants, 250,000 mostly women workers, along with students and disabled workers, will not even be covered by the minimum wage law.

Socialist Action protest against Cafe De Coral in Mong Kok, 9 November

The days leading up the government announcement were marked by a string of protests demanding HK$33, and targeting the shameful practises of big fast food chains who are among the worst exploiters of cheap labour in Hong Kong. The biggest chain, Cafe de Coral, provoked popular outrage when they announced a de facto pay cut for most of their 17,000 workers. The company, which has now been renamed “Cafe de Cruel” by minimum wage campaigners (a name that will probably stick unless the bosses spend millions on re-inventing their brand) increased hourly wage rises by HK$2 to HK$3.50 for staff, whose earnings are a paltry HK$22 to HK$25 (US$2.84 to $3.23) an hour, but at the same time cancelled their 45-minute paid meal breaks. The end result was lower wages!

A facebook group against “Cafe de Cruel” signed up 27,500 people within days, and the Confederation of Trade Unions (HKCTU) threatened a boycott of the chain. Kentucky Fried Chicken (KFC), which is owned by the world’s largest restaurant company, Yum! Brands, has been exposed for imposing a similar cut earlier this year. KFC raised hourly wages of its frontline workers to HK$21 – from HK$16 to HK$18 – but scrapped their paid 30-minute meal break. Attention is now focusing on McDonald’s and Burger King, companies which may also have adopted this “common practise”.

These are companies that make phantasmagorical profits. Cafe de Coral is the largest fast food operator in Hong Kong with 300 outlets including Olivers Sandwiches and Spagetti House. It is expanding aggressively in mainland China too, with plans to open 60 new restaurants in the coming year. Its latest reported net profit, in June 2010, was HK$492 million for the previous year. The company’s executive chairman Michael Chan Yue-kwong is the 35th richest man in Hong Kong, according to Forbes list, with a net worth of HK$560 million. Yet the long hours, extremely low pay and stressful work environment at Cafe de Coral restaurants mean that about 10 percent of staff leave every month, translating into a complete turnover in a year.

“I get paid HK$24 per hour, but there’s no union at the company,” a young woman who works for multi-millionaire Chan told chinaworker.info. She signed a petition denouncing the company as cheats and calling for union rights and a minimum wage of HK$33. The petition was organised by supporters of Socialist Action (cwi in Hong Kong) who staged two protests at Cafe de Coral outlets on Tuesday 9 November, one in the busiest area of Mong Kok and another at the University of Hong Kong (HKU) where the restaurants have been outsourced to Cafe de Coral. Socialist Action has been campaigning throughout the year for the minimum wage and for young workers to get unionised, with protest actions at several Cafe de Coral and McDonald’s outlets. Other groups organised similar protests on 9 November. Young members of the League of Social Democrats (LSD) staged a demonstration at the Tsuen Wan office of KFC.

This date, 9 November, had been designated for a city wide boycott of Cafe de Coral by the HKCTU and a coalition of over 30 anti-poverty groups including religious and political organisations. Then on 6 November, almost certainly as a result of government pressure, Cafe de Coral bosses announced they would reinstate paid meal breaks. This issue was highly damaging for the government coming just as it was to announce the new, and desultory, minimum wage level. Making matters worse, Michael Chan Yue-kwong of Cafe de Coral is the most high profile member of the nine-member Provisional Minimum Wage Commission that has sat for months pontificating about the wage level in a pretence of “impartiality” and “economic science”.

Incredibly, however, the leaders of the HKCTU campaign called off the 9 November action as a result of the last-minute retreat by Cafe de Coral. “The decision to call off the action was a mistake,” said Jaco Lam of Socialist Action. “The momentum was really building up and could have put a lot of pressure on this and other companies – and the government. What Cafe de Coral have agreed to is a small step for them, considering how scared they were by the negative publicity, they got off lightly because of this decision,” he said.

As a result of the Cafe de Coral dispute, bosses are now looking at other devious ways to cut costs and get around the new legislation. “Some bosses may try to get around paying the minimum wage by asking employees to become self-employed” warned The Standard (11 November). This measure means that employers shed their responsibilities to meet welfare and pension payments. This is especially a fear for workers in the security branch, which employs around 20,000 workers and currently pays an average wage of HK$26.60 an hour.

The events of the last week are rich in lessons. Fast food bosses have been shaken by the massive anger generated against them over the “Cafe de Cruel” scandal. This could have been, and must be, used to mobilise far greater pressure against the government and its sham commission – a commission that is rigged in favour of the penny-pinching bosses. The HK$28 must be rejected completely by the HKCTU and all groups that are serious about fighting for the minimum wage (scandalously, Lau Chin-shek, the former president of HKCTU endorsed the HK$28 decision as an appointed member of the government’s commission). The campaign for HK$33 must be stepped up with an immediate call for a mass demonstration and plans to step up protests that target and “name and shame” different employers.

Volunteers should be enlisted by the unions to take part in unionisation drives at fast food outlets and other strongholds of labour abuse. This can raise the confidence and understanding of their rights of the army of young workers in these “sweatshop” restaurants. With serious preparation, it would be possible to call a one-day warning strike of low paid workers in the run up to 1 May 2011, when the new minimum wage law will come into effect. The message would be simple: “HK$33 – or we strike!”

Socialist Action stall with petition demanding HK$33 minimum wage – no compromise!

Facts – wages and poverty:

  • Profits for some of Hong Kong’s biggest employers increased sixfold in the first six months of this year
  • The number of households with a combined monthly income of less than HK$10,000 (US$1,290) jumped from 498,000 in 1999 to 649,000 in 2009
  • Poverty is rising in Hong Kong even as the city gets richer – 33.9% of the over-65s and 20.1% of 15-24 year-olds live below the poverty line
  • Real wages are only forecast to rise by 0.5% next year in Hong Kong, the second lowest pace in Asia
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