The Hong Kong government announced on Oct. 2 (Friday) that it is raising the minimum allowable wage for foreign domestic helpers by 2.35%, from HK$5,100 to HK$5,220 a month; where an employer does not provide food and pays a food allowance instead, the minimum stays at HK,236 a month (South China Morning Post, The Standard, law firm Lewis Silkin). The new wage applies to contracts signed on or after Oct. 3; contracts signed at the old wage on or before Oct. 2 can still be processed at HK$5,100 as long as the Immigration Department receives them by Oct. 30 (Lewis Silkin). Officials gave the economy’s better performance over the past year as the reason (South China Morning Post). Chris Sun, Secretary for Labour and Welfare, defended the adjustment, calling the annual adjustment mechanism “balanced and acceptable,” and said that over the years the average annual increase has been about 2% to 2.5% (South China Morning Post). The South China Morning Post also reported that unions and employer groups were both disappointed by the decision. The reports we have seen give no figures for what either side wanted, so we do not speculate. The adjustment concerns foreign domestic helpers only and does not affect the statutory minimum wage for local employees.
Foreign domestic helpers’ wages are reviewed every year, affecting the care arrangements and household spending of several hundred thousand families. The size of the adjustment also reflects how the Hong Kong government balances helpers’ earnings, employers’ burden and economic conditions, and the disappointment on all sides shows how hard it is for this mechanism to satisfy everyone.
If you are renewing a contract with your helper or hiring a new one, contracts signed from Oct. 3 must use HK$5,220; those signed on or before Oct. 2 must reach the Immigration Department by Oct. 30. The extra monthly cost is about HK20; if the food allowance is included, check the total against the contract.
The Hong Kong government and the Labour and Welfare Bureau say the mechanism adjusts according to economic performance, that the increase is moderate, and that it is close to the multi-year average.
Unions and employer groups both said they were disappointed: the helpers’ side felt the increase was too small, while employers are concerned about costs. The reports give no specific figures for either side.
In an annual adjustment like this, what matters is not the size of the increase itself but how the mechanism will be calculated in future and whether more data will be made public. The Oct. 30 transition deadline is also very practical for households still on old contracts; we suggest confirming the documents early with the Immigration Department or the agency.
South China Morning Post · The Standard · China Daily Hong Kong edition · The Star · Business Today · Lewis Silkin (Oct. 2–8)
Society · LabourPress ✓ 5 outlets · figures announced by the Hong Kong government; law firm material supplements contract arrangements
Hong Kong raises foreign domestic helpers’ minimum allowable wage 2.35% to HK$5,220; unions and employer groups both express disappointment
The new wage applies to contracts signed on or after Oct. 3, and the food allowance stays at HK$1,236. The Secretary for Labour and Welfare called the annual adjustment mechanism “balanced and acceptable.”
The Hong Kong government announced on Oct. 2 (Friday) that it is raising the minimum allowable wage for foreign domestic helpers by 2.35%, from HK$5,100 to HK$5,220 a month; where an employer does not provide food and pays a food allowance instead, the minimum stays at HK$1,236 a month (South China Morning Post, The Standard, law firm Lewis Silkin). The new wage applies to contracts signed on or after Oct. 3; contracts signed at the old wage on or before Oct. 2 can still be processed at HK$5,100 as long as the Immigration Department receives them by Oct. 30 (Lewis Silkin). Officials gave the economy’s better performance over the past year as the reason (South China Morning Post).
Chris Sun, Secretary for Labour and Welfare, defended the adjustment, calling the annual adjustment mechanism “balanced and acceptable,” and said that over the years the average annual increase has been about 2% to 2.5% (South China Morning Post). The South China Morning Post also reported that unions and employer groups were both disappointed by the decision. The reports we have seen give no figures for what either side wanted, so we do not speculate. The adjustment concerns foreign domestic helpers only and does not affect the statutory minimum wage for local employees.
Open the story and DailyDrop’s take
By the numbers
HK$5,220Minimum allowable wage for foreign domestic helpers, up from HK$5,100 (South China Morning Post, The Standard)
2.35%Size of this adjustment; officials say the average increase over the years is about 2% to 2.5% (South China Morning Post)
HK$1,236Minimum monthly food allowance payable when no food is provided, unchanged (South China Morning Post)
The Hang Seng Index closed at 23,972 on Oct. 2 (Friday), down 640 points, or 2.6%, after touching an intraday low of 23,872. The Standard said rising US Treasury yields and oil prices led investors to cut risk assets. Financial stocks fell hardest: AIA Group fell about 6%, Standard Chartered nearly 6%, HSBC Holdings 5.4% and HKEX about 3%; the Hang Seng TECH Index fell 2.26% to 4,157, and Macau gaming stocks were also weighed down by continuing declines in gaming revenue (The Standard). Trading Economics’ market summary likewise recorded a 2.6% fall on the previous trading day but gave no point figure, so the points figure follows The Standard. Mainland markets are closed for the National Day Golden Week holiday, so turnover in Hong Kong stocks today may be thin.
A 2.6% one-day fall led by financial stocks shows that market worries over interest rates and oil prices are now reflected in the heavyweight stocks. AIA, HSBC and the like are heavyweights in the Hang Seng Index, and their falls drag the index down directly.
If you hold MPF, funds or bank and insurance shares, Friday’s fall will show in your account value; one big drop does not mean the trend has reversed, and trading decisions should not rest on a single day’s move alone.
Optimists say that after a sharp one-day fall, share prices are lower and the Hang Seng TECH Index has not collapsed across the board.
Pessimists point out that rising US Treasury yields and oil prices at the same time are bad for property and financial stocks, and that the mainland closure makes it harder for funds to judge direction.
At today’s (Monday) open, watch three things: whether financial stocks keep falling or rebound, whether US Treasury yields ease, and whether oil prices stay high. We do not predict the index’s direction; we only note that Friday’s fall was driven by interest rates and oil prices at the same time.
The Standard · Trading Economics · Tapeboard (Oct. 2–5)
Finance · Hong Kong stocksPress ✓ 2 outlets · points figure as reported by The Standard; the fall is also recorded by Trading Economics
Hang Seng Index plunges 640 points on Friday, falls below 24,000, led down by financial stocks
The Hang Seng Index closed at 23,972 on Oct. 2 (Friday), down 640 points, or 2.6%, after touching an intraday low of 23,872. The Standard said rising US Treasury yields and oil prices led investors to cut risk assets. Financial stocks fell hardest: AIA Group fell about 6%, Standard Chartered nearly 6%, HSBC Holdings 5.4% and HKEX about 3%; the Hang Seng TECH Index fell 2.26% to 4,157, and Macau gaming stocks were also weighed down by continuing declines in gaming revenue (The Standard). Trading Economics’ market summary likewise recorded a 2.6% fall on the previous trading day but gave no point figure, so the points figure follows The Standard. Mainland markets are closed for the National Day Golden Week holiday, so turnover in Hong Kong stocks today may be thin.
Open the story and DailyDrop’s take
Word of the day
US Treasury yieldFinance The annualized return on US government bonds. When it rises, borrowing costs more and the risk-free return is higher, so risk assets such as stocks look less attractive.