Cheap labor not the way forward

The government on Tuesday announced the Executive Council's endorsement of the report and recommendations of the Standard Working Hours Committee as a general framework to guide formulation of the working hours policy. The new policy framework is a small step forward toward standard working hours' legislation but there are obvious points that fall into the category known as "controversy baits" - tentative compromises that will prompt objections from both sides of the argument. Labor groups will find the proposal unacceptable because it seems to give employers too much leeway at the expense of employees; while many small business owners will say they can't bear the rising labor costs resulting from the new policy.

It is public knowledge that the standard working hours consultation process was marred by protests from labor representatives who simply refused to attend regular meetings toward the end of the term of the Standard Working Hours Committee. Their main concern with the policy recommendations has always been what they called "favoritism" toward business owners, although employers do have legitimate reasons to want flexibility in working hours rules. As we all know more than 90 percent of businesses in Hong Kong are small- and medium-sized enterprises; most of them are in the consumer service industry. Believe it or not, few if any of those small businesses can survive if labor costs rise by a large margin.

Looking on the bright side of the issue, Hong Kong already has a minimum wage law that is updated every second year. It is reason enough for all parties concerned to keep trying and formulating a solution to the working hours issue. To do so the government needs to convince employers to take responsibility for their employees' welfare, beginning with over-time compensation. The government promised industry-specific guidelines on working hours provisions for 11 separate industries in their employment contracts to protect employee interests. We hope those guidelines will prove a positive step in the right direction. More importantly, it is proposed that the policy applies only to employment contracts worth HK$11,000 or less a month. This ceiling sounds low to many people and the government might consider adjusting it upward to garner more support.

Let's be realistic: We have long passed the point of no return in terms of labor rights protection. We have no choice but to move ever closer toward having a standard working hours law. The process cannot be prolonged indefinitely. Higher incomes mean greater purchasing power and more spending. Labor costs are a major part but not the only thing that matters when it comes to business profitability. People cannot stop thinking about improving business efficiency once they start, or it will fail sooner or later. In this day and age the best way to achieve business success is with knowledge, not with cheap labor.