As Hong Kong marks 28 years since its return to Chinese sovereignty, its economy faces increasing challenges. Despite widespread business closures and economic stagnation, Chief Executive John Lee continues to insist the city has turned a corner. However, a new report from Hong Kong Labour Rights Monitor tells a different story — one of deepening inequality, stagnant wages, and worsening conditions for low-income workers.
Wages Lag Behind Economic Growth
The report, titled “Hong Kong Workers’ Pay: Post-Handover Trends, Union and Government Roles, and Policy Recommendations”, reveals that since 1997, the real wages of Hong Kong workers — adjusted for inflation — have risen by only 46.6%, or an average of just 1.4% per year. In contrast, the real economy has grown by nearly 100% in the same period.
This means workers have not benefited from economic growth, with most gains going to corporations. Despite working harder and longer, many workers struggle to meet the cost of living.
Minimum Wage: A Broken Safety Net
Hong Kong introduced a statutory minimum wage in 2011, aimed at protecting the city’s lowest-paid workers. But the report shows that this protection has failed in practice. While the minimum hourly wage rose from HK$28 in 2011 to HK$40 in 2023 — a 42.9% increase — the city’s per capita GDP rose by 60.3% over the same period.
When adjusted for inflation, the real purchasing power of the minimum wage has increased by just 1% in 13 years — effectively remaining stagnant.
Minimum Wage Beneficiaries Plummet
Initially, about 180,000 workers — roughly 6.4% of Hong Kong’s private-sector workforce — benefited from the minimum wage. By 2023, that figure had plummeted to under 18,000 (just 0.6%). Even in traditionally low-paid sectors like security, cleaning, and property management, workers’ wages are now more influenced by market conditions than by legal wage floors.
Flawed Adjustment Mechanism
Although the government has agreed to review the minimum wage annually, it uses an extremely conservative formula: only factoring in inflation and a small portion (20%) of the gap between GDP growth and long-term trends. The report criticises this method as illogical and tilted in favour of business interests, making it nearly impossible for wages to keep up with the rising cost of living.
Instead, the report calls for wage adjustments to be based on both the inflation rate of essential goods and the average labour productivity growth over the past five years.
A Growing Underclass of Working Poor
As Hong Kong’s economy continues to slow, more workers are being pushed into insecure, low-paid jobs with little to no protection — forming a growing underclass of “working poor.” The report warns that the current minimum wage system is failing in its core purpose: protecting workers from exploitation. Worse still, it risks becoming a tool for the government and employers to suppress wages further.
If no urgent action is taken, more and more workers in Hong Kong may find themselves working harder, earning less, and falling deeper into poverty.