TNAG-0650-FCO40-798-Study-of-labour-relations-in-Hong-Kong-by-Professor-H.-A.-Tu-1977 — Page 52

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other's s labour. There is no doubt in my mind that, where a few large companies dominate an industry and these companies are run by men of common ethnic origin (thereby overcoming the linguistic/cultural heterogeneity and divergent employment practices which inhibit: employers' cooperation in HK), employers are able effectively to maintain a common wages policy to determine a common rate of wage increase which "keep us one step ahead in the game", but which is in no way the product of "market forces". Employers will always seek to prevent a runaway wages spiral by observing at least some rules of non-competition between themselves.

Having said this, however, we cannot overlook the manifest imperfections of any attempt to impose an employer-regulated model on the HK situation. Divisions within an industry are common-place; there is no formal machinery to harmonise wages policy; sectors like manufacturing (garments, electronics etc.) who employ large bodies of relatively scorce, mobile, semi-skilled operatives are incapable of keeping down wages - the wige and denim booms .provile good examples of this, and, when it happens, the labour market is competitive enough for the ripple effects of rises in one sector to spread pretty widely through the rest of the economy. (An econometric study of wage trends in various sectors, for which there is ample data, would reveal just how this works.)

In general, employers enjoy a high rate of return on capital; in the absence for collective bargaining by workers, they are able to absorb increased wage costs with varying degrees of equanimity. When the market is not pushing wages up, they must arrive at an arbitrary figure for annual wage increases which they are able to agree among themselves is equitable. This general rate is set at the tor, in the higher echelons of the colony's ruling class (Jardines and the like), and the government is an integral part of the mechanism whereby a common standard is diffused through the economy as a whole.

10. Government's role in the oneration of the labour market :

(a)

Its own pay policies and labour relations: this topic is fairly well covered in our private notes and it is one which we have discussed frequently. For the last five years or so, the pay investigation unit of the Civil Service Pranch has been monitoring wage trends in 68 companies selected for their similarity to government. I.e. these are the largest companies in HK, most of them having a keen eye to FR and committed to hiring the best the labour market has to offer. We can be certain that the wage rates in these companies will be among the highest in HK.

The findings of this survey become the raw data for negotiations between the CSB and three unions whose membership is weighted towards senior clerical staff indeed the form for these negotiations is the Senior Civil Service Council. A general rate of increase is agreed upon (with the Financial Secretary wielding a veto which Le used in 1975) and this is passed on throughout the civil service, with much attendant publicity outside (for reasons which will become obvious below, sections 10(b) and 11). Apart from this general rate, individual segments of the government's labour force may and often do petition for regrading and salary increases.