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JUNE 26, 1969
from 157 to 221 over the same period. Workers involved in the manufacture of garments and shirts found their pay ts rose from 172 to 224 over the same years. This upward trend in wages is paralleled in the export quantity index. While the annual figure for cotton fabrics (up_5%% from March 1966 to March 1969) shows only a marginal rise and those for textile yarn (26% down) and made-up articles of textile material (5% down) have declined, cloth- ing has increased in volume by 67% since 1966/67 and last year achieved a 46% growth.
The same pattern can be seen in the rubber footwear industry for which more precise arithmetic is possible. Its employers pay the highest wage rates of any export manufac- turer on the Labour Department's 10-industry list. The quantity index since 1965/66 went up 22% (1966/67), a “further 6% (1967/68) and then 37% (1968/69). Compara- tively wages have moved up by 18% in 1966/67; an addi- tional 21% in 1967/68; and finally by 15% in 1968/69. The indication here is that although wages went ahead in 1967, there is now some leeway to be made up in view of the industry's unprecedented export boom of last year.
At the other end of the scale, the manufacture of metal torch cases is the least attractive undertaking listed from the workers' viewpoint. Great strides were made in lifting the wage levels of employees in the industry to a par with other industries in 1964/65 but they have since slipped back. The export quantity index reveals a 44% rise since. March 1966. Wage rates over the same period have risen by: a
a pedestrian 19%. The room for improvement is obvious. A third test of the pattern behind wage increases can be taken from the manufacture of enamelware which since March 1966 has increased the value of exports from $38.43 million to $42.12 million. But the physical output of the industry, seems to have actually fallen. (The export quantity index registers a 4% decline.) Wages, however, have follow- ed the growth in the value of exports and gone up 28%. This seems to be a very significant increase since productivity in terms of physical output in the industry has dropped. (Perhaps this industry began with high profit levels which have since been cut to retain the labour force.)
Similar examples can be drawn up for all industries active in the export field for which wage statistics are avail- able. At the same time, allowance must be made for an expansion in the work force which has occurred to varying degrees in different industries. But the overall conclusion from the comparative statistics seems valid enough. Though the figures reveal no exact parallel between productivity and wages, they do provide a guide to what can be afforded in
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FAR EASTERN ECONOMIC REVIEW
the way of wage rises and the extent to which industry is giving its employees a fair share of its prosperity.
Inevitably wage rates will climb more slowly where the growth of output is less spectacular. Just as inevitably, workers will tend to be attracted to industries which, having a better export record, can maintain an upward wage trend. Where labour is in short supply, this may mean
a drift away from the more established export sectors,, though the tendency is for new growth industries to pay lower wage scales at first and to take their time in getting up to the rates workers can expect in traditional export industries.
Hongkong has not had to fear inflationary pressure from "rising wages and stagnant or falling productivity not only because of industry's high growth rate but also because labour has not been organised. The absence of strong trade unions aware of their members' needs has meant management often taking the lead in reappraising wages. As a result wage rises tend to follow export orders linking wages fairly directly with the value of what is produced. Manage ment obviously prefers to pay up as and when it feels a general increase can be afforded.
Wages have stayed ahead of rises in the cost of living a 41% overall increase in pay in commerce and industry over the last four years compared with a 13% climb in the cost of living index. The factor, therefore, that is most likely to alter the present system of wage rises largely granted on management's initiative is a change in labour relations and an improvement in labour's bargaining position in negotiations with employers.
Hongkong's "political" unions are unlikely to affect the 1 status quo, but there are signs of an increased two-way communication between labour and management, perhaps the most hopeful of which is the Labour Department- sponsored scheme to set up joint consultative committees in industry. Some 40 of these committees have been established, many in the last year. Though they have been more widely introduced into public utilities than export industries (only one textile firm has adopted this form of management- worker representative committee), those which do exist work well. Turnout in elections to pick the workers' representa atives is often 90%. The committees are not negotiating bodies and do not discuss wages except possibly piece-work rates but they are an outlet and first channel of communication between the factory floor and the manager's office.
1.
The Labour Department feel that the success of these committees depends to a great extent on their acceptance being actively canvassed by bodies like the Chinese Manufac- turers Association. The impetus given to this form of re- presentation by the Employers Federation shortly after the 1967 disturbances has now been largely dissipated, and the paternalism of industrialists, particularly those engaged in export industries, has reasserted itself with a visible distaste for consultative bodies involving labour representation.
a
Establishing joint consultative committees will be long process, but success in this field (and in less promising attempts being made to organise non-political unions) could well imbue workers with a new sense of confidence in taking up wage claims. Rises would bring about a less unequal relation between wages and productivity in certain industries where wage rates have been "held" in spite of increased output and ensure the worker a fuller share in the fruits of his labour. Though it is different to gain a complete picture for all export industries, indications are that the worker would have much to gain and little to lose if wages were more closely tied to productivity.
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