Photo: jonathan van smit on flickr
Hong Kong just passed its first ever minimum wage law, and it’s not just for show.A minimum wage of $3.61 an hour poses a big enough hurdle as to put one per cent of profitable companies in the red, while forcing layoffs of up to 50,000 people when law takes effect on May 1, according to government estimates. It sounds like they also intend to enforce this law.
In other words, this is exactly be the kind of hard decision necessary to rebalance China’s economy — and the extremely unequal city of Hong Kong.
It’s also confirms claims by Jim O’Neill and others that the currency war isn’t real and China is letting the yuan appreciate just fine.
Assuming, that is, these wage laws don’t fizzle out like many in mainland China. After Foxconn doubled worker wages in Shenzhen, for instance, they quietly shifting most workers to factories in a different area.