Good news, companies offer pay rise. Bad news, it barely covers Hong Kong inflation rates.
This is the situation workers face lately as the rising cost of living in Hong Kong is hardly covered by wage hikes. And the Census and Statistics Department has the numbers to prove it. Average wages in September of last year rose 2.4 percent compared to previous year yet its purchasing power has shrunk significantly to just about 0.8 of a percentage point. It’s obviously worse for those who didn’t receive salary increases.
In a city known for its expensive residential dwellings, rising cost of food, utilities and transportation it is the last thing we want to hear in the news. Overall consumer price index in September was 3.2 percent higher than the same period the previous year with food prices shooting up 5.1 percent.
But as the city emerges from the doldrums of the economic downturn, 55 percent of companies are willing to offer higher salaries to members of the workforce. Professional and business services and financial and insurance companies recorded the highest increases, 3.1 percent and 3 percent respectively. Unfortunately, there are also firms – 37 percent of those surveyed – that actually slashed monthly wages. The manufacturing sector posted a fall of 0.3 percent.
Dr Mo Pak-hung, associate professor in the Department of Economics at Baptist University, predicts wages will eventually begin to catch up later in the year. As workers from certain industries start receiving pay hikes, they are more likely to spend more. With extra dollars to spend, they hopefully stimulate certain industries like tourism, retail and catering. And that’s good news for workers across other sectors.