17
i
are bringing about certain behavioural changes in the
community which, in due course, will operate against the
free play of market forces. In particular, it is argued
that Hong Kong's rising standard of living will lead to
militancy in the labour market which will push up the rate
of increase of money wage rates; as a result, unemployment and internally generated inflation will emerge, the rate
of growth of the economy will decline, the balance of
payments will move into fundamental disequilibrium and the Government will be put into the impossible position of being expected to intervene to raise aggregate demand in circumstances where, if intervention were contemplated,
just the reverse would be necessary.
29.
{
It should be borne in mind that twenty years ago
money wage rates in Hong Kong were among the lowest in
Asia; now they are among the highest. But this does not
mean that unit labour costs have risen rapidly; nor does
it mean that there has been a militant labour force.
Instead, the increase in money wage rates reflects the fact
that there has been a remarkable increase in productivity;
and it is this rise in output per capita that explains
why real income per capita has risen so rapidly in Hong
Kong. Because the work force has been able to reap fully
the benefit of its own determined efforts there is, in
Hong Kong, no history of employer-employee confrontation
and consequently there is no latent hostility and lack
of trust in the labour market to come to the surface
as the community becomes more affluent. At the same time,
/the