Hong Kong minimum wage to rise 8.7% $37.50 in May

It's the biggest increase since the scheme was introduced in 2011.

The minimum wage in Hong Kong is set to rise by 8.7% to $37.50 (US$4.80) per hour from the current $34.50 in the largest hike implemented since the statutory minimum wage first launched in 2011, reports South China Morning Post.

Also read: One in five are living in poverty in Hong Kong

The Executive Council is said to have endorsed the increase after a recommendation from the Minimum Wage Commission. It will take effect on May 1. 

Low-paid workers, which are mostly in the security and service sectors, are set to benefit from the hike although the business sector is said to incur an additional $700m a year in expenses to cover the increase in wages. 

The minimum wage rate in Hong Kong is reviewed every two years. From $28/hour in 2011, the minimum wage rose 7% to $30/hour in 2013. It rose by another 8.3% to $32.50/hour in 2015 and 6.2% to $34/hour in 2017.

Also read: The rich get richer: Hong Kong's affluent gap widens

However, Hong Kong’s minimum wage still trails behind the pay of developed countries, observed SCMP. Australia has the highest minimum wage in the world at US$13.60 (AU$18.93) an hour.

Despite global recognition as one of the world's richest cities, Hong Kong is wracked by growing inequality as its residents grapple with skyrocketing property prices. An average Hong Konger earning $50,000 in annual income would need around $900,000 to purchase a home, according to annual Demographia International Housing Affordability Survey, which puts the median house prices in Hong Kong divided by annual median household income at 18.1.