Question

Article 2 Improper to raise minimum wage in battered economy, Hong Kong business leader says, warning more unpaid leave could follow move (SCMP, 27 Sep 2020)2 Raising the minimum wage would be inappropriate in a struggling economy, a Hong Kong business leader said on Sunday, despite other places increasing what the lowest paid make per hour. Federation of Hong Kong Industries honorary president Jimmy Kwok Chun-wah defended the sector’s suggestion the benchmark remain at HK$37.50 (US$4.80), and warned more workers could be forced to take unpaid leave, especially now that the government had decided not to extend the wage subsidy scheme. In contrast to Hong Kong, the hourly minimum wage in New York is US$15, and in Britain, the national minimum wage for adults over the age of 21 has been £6.50 (HK$64) an hour since 2014. While commission members from the labour sector called for an increment to at least HK$39, business sector representatives insisted it stay at HK$37.50 or be raised to just HK$38, saying the coronavirus outbreak had battered the economy.

Article 3 Carrie Lam has said Hong Kong will consider a return to rent controls. But what are they? (SCMP, 17 Jan 2020)3 Tenancy control regulations that have been put aside for 16 years in Hong Kong will be reconsidered, city leader Carrie Lam Cheng Yuet-ngor said as she announced a raft of relief measures on Tuesday. Rather than regulating all flats, the government's focus this time will be on subdivided units - the so-called shoebox flats often regarded as the last housing resort for the needy…….. Tenancy controls have been implemented a few times in Hong Kong - from 1921 to 1926, and from 1973 to 2004 - as a short-term measure to counter unusually high rent increases during housing shortages. But research carried out in 2014 by the administration of Leung Chun-ying concluded that imposing tenancy controls again would trigger a lot of controversies. Economically, any rent control measures would only lead to landlords asking for higher starting rents and becoming more selective over tenants, it found. And politically, there is a 50-50 split between tenants and owners in Hong Kong, making it very hard to reach a consensus on the legislation. Countries such as Spain and the Netherlands, as well as four states in the US - California, New York, New Jersey and Maryland -have introduced rent controls. The newest such controls came in Berlin, Germany, passed into law last October. Under the law, landlords cannot charge rent higher than what the previous tenant paid, and tenants can sue landlords if their rent exceeds ceilings set by the government. In the Netherlands, the law strictly prohibits landlords from overcharging tenants for water and power. Electricity and water bills must be separated from rent, and landlords are not allowed to charge tenants more than 20 per cent above the original price for furniture and home appliances.

Question 3: With reference to Article 2 and 3, discuss the consequences of minimum wages and rent controls on different stakeholders in the society.

Answer 1

The consequences of minimum wages and rent controls on different stakeholders in the society are :

1. More workers could be forced to take unpaid leave , specially after decision to not extend the wage subsidy scheme.

2. Business sector representatives insisted that since corona virus battered the economy , increase in wage rate could have bare consequences.

3. Imosing rent controls would again trigger a lot of controversies.

4. Landlords would ask for high starting rents and they would become more selective on tenants.

5. The law strictly prohibits landlords from overcharging tenants for water and power.

6. Landlords will not be allowed to. Charge more than 20 percent above the original price for furnuture and home appliances.

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