CONFIDENTIAL
Wage rates in Hong Kong (and they are now possibly second to Japan in South East Asia) are only one of a complex of factors than have made for export success. What must be said, however, is that market forces will not ensure either a more equitable sharing of prosperity by the people of Hong Kong or an improvement in the living standards of ordinary people without a more positive policy of intervention in the future than has been the case in the past.
It is fair to say that since brilliant economic success has been achieved thus far with the minimum of intervention by the Hong Kong Government, there has been reluctance until recently to change that policy in the pursuit of social objectives that might result, (for example) in higher taxes and a wider tax base. There are now limited but welcome signs of change.
3. In the area of labour standards, this reluctance to intervens has been reinforced by constant concern about Hong Kong's competitiveness. This is indeed a legitimate concern but has resulted too often in very modest improvements in the standards of the work force being frozen or deferred. There is little doubt that intervention by the Hong Kong Government to improve the working conditions of the labour force could have been carried forward at a faster pace over the past 10 years without jeopardising economic growth. Indeed, but for the emergency of 1967 we might still be hearing the argument that the 10 hour dur. 6 day week for women and juveniles was essential to Hong Kong's survival. Now we are told, in a year when Hong Kong's total volume of trade brought her to ninth place in the world, that a reduction of permissible overtime for women and young persons from 300 hours a year maximum to 250 (and after a year to 200 hours) raises problems of Hong Kong's competitiveness and just- ifies research about what happens in neighbouring exporting countries!
4.
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In the circumstances of Hong Kong where weak and divided trade unions and a multiplicity of small industrial undertakings combine to make relatively ineffective, worker pressure for improvement in their employment conditions, the responsibility of the Hong Kong Government to legislate in this field is especially important. There remain several significant areas where this responsibility should now be exercised. They are described later in this report.
Wages and the Cost of Living
"The underlying upward trend of retail prices of foodstuffs
this year has been 29% compared with 11% in the whole of 1972". (Financial Secretary's statement in Legislative Council, 29 November 1973).
5.
wages.
This may be a difficult year for Hong Kong in the field of Wages in Hong Kong are determined and maintained to a
For an analysis of this issue see, paragraphs 22 to 26
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CONFIDENTIAL
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