By George Chen
The opinions expressed are the author’s own.
First, we were worried about inflation in mainland China. Now it seems Hong Kong’s inflation situation in coming months looks no better. I blame the worsening problem partly on the city’s first-ever minimum wage law, effective May 1.
As I study international political economy at the University of Hong Kong, my professor and classmates do know I am a free market fan and don’t believe a minimum wage will help Hong Kong’s economy and boost employment, as some Hong Kong lawmakers assert.
The sad truth is I went to buy my favorite Pearl Milk Tea on May 1 and found it was 2 Hong Kong dollars (about US$0.26) more expensive. Then I went to check out McDonald’s — prices for some of its burgers and drinks have also risen about 2-3 percent. And last night, local media said taxi and tram fares were going to rise in the former British colony too!
A friend of mine reported that the property management fee for his apartment building was going to increase about 30 percent, mainly because of the minimum wage law. Otherwise, the tenants may have to decide whether to lay off some staff to keep the management costs unchanged.
Local media said some small and medium-sized enterprises also planned to reduce headcounts in response to the minimum wage law. If so, Hong Kong’s economic growth may also take a hit.