Principles of Economics

¶ … Economics

The Hong Kong government launched the Wage Protection Movement in the month of October in 2006. Since its launch, the wage protection program and policy being implemented in Hong Kong has been going through a vigilant process of legislation and many have questioned whether its implementation and legislation will make the economics of the country better or worse. In this paper, we will highlight the overall process being implemented by the government of Hong Kong and take a position either for or against their procedural inclinations.

Introduction and Legislation of Wage Protection

The legislation of wage protection has undergone numerous criticisms over the years, in different countries ad economies for various reasons. In the industrialized nations of the world, like the U.S., the wage protection legislation was hurdled tremendously by the company owners and administration as they felt like they lost entire control over the way that the employees not only earned their income but also over how they spent it. Furthermore, economically speaking, the wages of the employees, which are designated as the internal market of a firm, play a huge part when a business goes into receivership and if the wages of the employees are not fully paid then the employees have to take their claim on a personal level to pay for the outstanding wages under the wage protection policy. This further discouraged many of the industrialized nations to legislate the wage protection policy. Also in countries like Africa, the legislation of wage protection failed due to the overall poor institutional structure an development, whereas in Russia the huge socio-economic upheaval that occurred largely hurdled the proper legislation and implementation of the wage protection policy.

Body

Wages can be simply defined as the income or earnings of a people within a country. Many employers, employees and economists view wages as the core determinant of a worker's overall income. The importance of wages also lies in the fact that many of the pensions and compensation packages for employees are based on the wage dynamics and percentages.

The wage protection program was first launched under the 'Wage Protection Act 1983' and basically means that the payment of wages was compulsory in all circumstances. The wage protection act also ensures that the unnecessary and illegal diminutions in wages were monitored and prevented under strict policy rules for all the employers. The 'Wage Protection Act 1983', as it is being followed in Hong Kong, basically concentrates on the following aspects within the economy:

The subtractions from the overall wages

The owners receiving the overpayments

The payment of wages in cash or tangible money

The general consensus on the method and type of payment of the wage between the employer and the employees

The consistency of the payment of wages even in the absence of the employer

Since the government of Hong Kong has launched and implemented the Wage Protection Movement (WPM) in the year 2006 specifically for the cleaning workers and security guards, they have recorded the following positive impacts in the overall social structure of this particular income group:

There has been a steady shift in the overall perception of the minimum wage towards a more positive outlook within the community especially after seeing the overall increase in the household income of the cleaning staff an security guards,

There has been recognition of the significance of the wage protection program and policy for the grassroots level workers,

The overall social responsibility within industries and business corporations has increased significantly,

There have a steady increase in the overall proportion of employees who have experienced benefits after the implementation of the WPM program.

However, despite the positive changes mentioned above, the government recognizes that the overall situation and impact is still below par. This is so because wage protection programs can only be implemented to an extent under the voluntary situations that the government of Hong Kong applied. This is why the WPM program was discontinued in the October 2008 and the government decided to focus more so on the overall application of a constitutional and legal minimum wage principle and policy.

There are basically three forms of minimum wage protection policies being legislated for implementation in Hong Kong, which are:

1. The 'adult minimum wage': this is relevant to all the workers who are working at the age of 16 and are either trainees or completely new to the realm of corporate work

2. The 'new entrants minimum wage': this is relevant for all workers with the age of 16-18 who have not worked for a total of 200 hours or three months; this is also relevant to the same age group who is either employed as a trainee or an instructor to the trainees

3. The 'training minimum wage', this is relevant to all workers over the age of 16 who are employed as professional in the corporate, training or business world with more then 60 annual business credits.

Some of the basic advantages that the wage protection program brings forth, with specific attention to the Hong Kong economy, include: the fast payment of salaries and tangible money; it encourages a heightened level of professionalism, training and productivity amongst the employees; it acts as a balancing mechanism and can decreased the overall poverty levels within nations if its application is monitored and regularly evaluated with eth changing situations; it can be very effectively used to decrease the overall poverty in the third world countries; it can be used to decrease the overall unskilled and untrained ratios of workers in the industrialized as well as the third world countries; and the free market phenomenon that exists right now might completely be eradicated with the implementation of the wage protection programs and policies.

Some of the basic disadvantages that the wage protection program brings forth, with specific attention to the Hong Kong economy, include: the fact that the overall laws and policies of the wage protection program are not extensive or expansive in nature; compensation or reimbursement apart form monetary payment is rarely ever given to the employees; the overall level of inflation within a country may rise drastically if the sales and revenue generated do not match up with the ratio of wages provided to the employees; the overall unemployment rates may rise as a result of the inflation; the overall recession that most economies are facing in the world may discourage the implementation of wage protection due to the possibility of further inflation; many employers might look to invest businesses in places where they will find cheaper and unskilled labor so that they will have to pay less wages to their employees under the wage protection program because of the discriminatory proportions of wage distribution between skilled and unskilled labor forces; if the minimum wage level under the wage protection program is set at a lowered level of proportion, it will invoke higher levels of poverty and decreased household incomes. Keeping all of the aforementioned facts in mind, we will conclude by either siding with or standing against the legislation of Wage Protection in Hong Kong.

Conclusion