Minimum wage yields diverse opinions

Tuesday, July 27, 2010
Issue 1073, Page 3
Word count: 942
Published in: Macau Daily Times

By Poyi (Natalie) Leung

The introduction of a minimum wage is essential to protect disadvantaged workers as well as to prevent cross-generation poverty in society, says the Macau Federation of Trade Unions (FAOM). While it slams the Government for being indecisive in pushing forward the legislation, both the Labour Affairs Bureau and the Small and Medium Enterprises Association argue that Macau is not ready for such a change and the existing low-income subsidy scheme is already “good enough”.

Lei Chan U, deputy secretary-general of the FAOM and member of the Minimum Wage Legislation Study Group, told the Macau Daily Times a minimum wage is more than just about being able to support grassroots workers and their families’ basic living needs.

“In the long-term it is also about the families’ development needs, meaning whether or not these low-income workers’ children will have the opportunity to receive more advanced education so that cross-generation poverty can be avoided,” Lei said.

Lei said that generally working people who earn less than 50 percent of the monthly median income per month in Macau are regarded as the working poor.

“Based on this definition, the indicator was set at MOP 4,500 in the fourth quarter of 2009. That means there were more than 40,000 locals belonging to this class in Macau.”

Earlier this year the study group conducted a survey asking how Macau residents, including workers from different industries and shop owners, looked at the introduction of a minimum wage.

Lei said a majority of the respondents said they had paid attention to news about minimum wage legislation and agreed that it was necessary to enact a law in Macau.

The findings also suggested that the hourly wage should be set between MOP 25 and MOP 30, while the monthly wage from MOP 6,000 to MOP 8,000, depending on the job type and industry.

“I can’t say for all the people that there is already a consensus, but the results suggested that society won’t reject the legislation and even tends to have a Macau-wide minimum wage system for all occupations and industries,” he told the MDT.

“I think it’s the right time to enact the law. Macau’s GDP and locals’ income levels have been growing well in recent years, if the Government still hesitates now I really don’t know when the best time to legislate minimum wage will be,” he added.

Macau already has the International Labour Conventions in place and the “Employment Policy and Labour Rights Framework Law” that includes a pay adjustment mechanism was promulgated back in 1998. Lei thus questioned why a minimum wage still doesn’t exist in the territory.

“If it is not indecisive, then what is it?” he said.

The low-income subsidy scheme, introduced in 2008, subsidises local permanent residents who earn less than MOP 12,000 per quarter, until their income reaches MOP 12,000.

Lei said although the scheme is effective to a certain extent in easing the living pressure on low-income workers, “some employers abuse it by intentionally cutting workers’ salaries” since they can get the difference from the Government.

“It is impossible to solve the problems of working poverty by solely relying either on the low-income subsidy scheme or a minimum wage, the two have to be carried out at the same time,” he said.

“If there is only the low-income subsidy but without a minimum wage, public funds will just go to employers’ pockets eventually.”

A so-called minimum wage standard, at MOP 21 per hour, was also introduced in early 2008 for outsourcing cleaning and building security services in public departments.

“The level is no longer up to date and there is room for an increase,” Lei said. “Inflation keeps rising and it’s time to review the standard.”

Subsidy ‘works better’

Meanwhile, Shuen Ka Hung, director of the Labour Affairs Bureau and coordinator of the Standing Committee for the Coordination of Social Affairs (CPCS), argued that according to the international conventions, a consensus between employers, employees and the Government must first be reached before minimum wage legislation can be enacted.

“But until now, we still can’t obtain an agreement,” Shuen told the MDT.

“I think Macau and Hong Kong are facing the same challenges. I believe it’s not difficult to have the law passed, but the problem is setting the minimum wage levels. If the level is too low, the legislation will become pointless; if it is too high, some SMEs can’t afford it and are forced to close down and some low-skilled workers may also be fired.”

According to the bureau director, the low-income subsidy scheme “makes Macau better than other places in the world” and is a “win-win situation” for both workers and SMEs.

“The subsidy exactly suits our economic development and we think what we’re doing now is more appropriate than to establish a minimum wage,” he said.

When asked about the suspected abuse of the scheme, Shuen stressed that “if there is any evidence we must investigate into it and punish the employer”.

He also said that the Government will review the outsourcing cleaning and security services’ wage standard “whenever it is needed”.

Coordinator Lou Hio Ian of the Macau Small and Medium Enterprises Association (APMEM) told the MDT “it won’t be appropriate to legislate minimum wage in a foreseeable future in Macau”.

A minimum wage will be “actually doing more harm than good for low-income low-skilled workers”, Lou said. “When a minimum wage is established, employers must choose the candidates who have higher qualifications and skills.” In other words, those who remain employed gain higher wages at the expense of those who are no longer employed.

Hence, she said the association prefers the low-income subsidy than a minimum wage.


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