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Minimum Wage Policy in Hong Kong: A Shift in Developmental Welfare Capitalism?



Parallel abstracts

As an important case of developmental welfare capitalism in East Asia, the Hong Kong government has long held that excessive social welfare may harm the competitiveness and that economic growth benefits all segments of the society. In recent years, the fruits of economic growth failed to trickle down to the low-income workers, resulting in a widening wealth gap. In order to maintain social stability and to consolidate the electoral base, the Hong Kong government raised minimum wage several times over the past decade. However, rising income inequality does not automatically lead to higher levels of minimum wage, it also depends on the state of economy. The reviewing committees carefully decided the minimum wages to make sure that this adjustment did not affect Hong Kong's economic competitiveness. Nevertheless, adopting minimum wage policies does not mean that Hong Kong is moving in the direction of balancing economic development and social justice. By examining the development of several important labor policies, we find that the government pushes through minimum wage policy while postponing other labor policies, including unemployment insurance, standard working hours, and the rights to strike and collective bargaining. This is because minimum wage policy exerts less impact on the market than other labor policies and does not encourage the collective actions of labor. Overall, the existence of elections induces the Hong Kong government to respond to the demands of low-income workers, but its semi-authoritarian system hinders Hong Kong in moving toward a more comprehensive social-protection system.


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