Hong Kong Wage Rate Increases, But Only by 0.1% After Calculating Inflation

Hong Kong’s average wage rate in June 2022 based on the wage index across all identified industries has risen nominally by 1.9% from a year ago, as reported by the Census and Statistics Department. However, taking into account inflation, actual wage growth is a measly 0.1%.

Calculation of the wage rate includes the basic wage in addition to recurring allowances or bonuses. Irregular payments such as discretionary or conditional bonuses as well as overtime compensation were considered as part of the “payroll” rate instead, which tends to show a larger year-on-year increase. The research is conducted on a quarterly basis based on the Labour Earnings Survey, but only encompasses employees up to the supervisory level.

Sectors that saw consistent growth include hospitality services, food service, retail trade, as well as socio-personal services.

The Hong Kong government, which recently dismantled its mandatory hotel quarantine, is expecting the recent economic pick-up to continue and support further wage increases.

“[A]s long as the local epidemic situation remains under control, the recent revival in local economic activities and improvement of the labour market should continue in the near term, thus rendering support to wages and labour earnings,” according to a government spokesman.