Hong Kong construction union freezes salaries for first time since 2007

By Xie Jun and Wang Yi Source:Global Times Published: 2019/10/17 21:23:40

A view of Hong Kong in July. Photo: VCG

The Hong Kong Construction Industry Employees General Union (HKCIEGU) announced plans to freeze the salaries of 15 engineering professions including concrete and reinforcement fixing, the first such action in 10 years, as the ongoing riots have dealt a huge blow to the city's businesses, Hong Kong media reported. 

This decision means that workers in those professions won't get any salary rise as they did in the previous years. The freeze will start next month. 

Huang Ping, director of the HKCIEGU, said that the last time the organization suggested a pay freeze was in 2007 because of the lasting impact of the SARS epidemic. 

"But this time, the pay freeze was resulting from man-made riots instead of disease," Huang said, referring to blows caused by the months-long unrest to the local economy, the Hong Kong-based Oriental Daily reported on Wednesday. 

The newspaper cited some senior executives of Hong Kong-based industrial trade unions as saying that the violence in Hong Kong has obstructed operations of many construction-related projects. For example, as shopping malls in Hong Kong have often closed early in recent months, many furnishing projects just can't proceed. This has brought large losses to the industry. 

Hong Kong's construction industry recorded an average unemployment rate of 5 percent in the first eight months of this year, far above the overall level, data released by the HKCIEGU showed. 

Pay freezes are an extraordinary measure for industries to weather economic difficulties and for companies to cope with financial constraints, but they're only useful as short-term buffers in special situations, said Liang Haiming, a Hong Kong-based economist. 

"Industries hope the region's economy will recover from the impact of the unrest as soon as possible, but if the social order could not be restored in a timely way, the one-year salary freeze period may be extended. There may also be a higher unemployment rate, " Liang told the Global Times on Thursday. 

Another Oriental Daily report noted that Hong Kong's legal minimum wage might also be frozen or even cut for the first time. 

Song Ding, a research fellow at the Shenzhen-based China Development Institute, said that the violent protests and unrest in Hong Kong have had a severe impact on the entire industry chain in the region, and that impact might persist at least for another half a year. 

"What Hong Kong's economy badly needs is to restore social order. Many industries and companies were not prepared for such lengthy disorder, and they are suffering severe losses, " Song said.

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