If policy engineered with careful design actually worked, we’d be living in utopia

In an oped to the public recently, Secretary of Labour and Welfare Matthew Cheung cited that Minimum Wage was a safe policy because of “careful design,” saying that the “possible economic downside of a Statutory Minimum Wage can be mitigated through careful design.”

His comment raised a few eyebrows: is careful design not always used in government’s policymaking? We are confident that every project has undergone “careful design.” The 85,000 units of housing policy were implemented under careful design, as was Hong Kong’s Disneyland, Cyberport, and today’s West Kowloon. The mother tongue teaching language policy must have been just as carefully designed as the fine tuned policy to fix it.

Careful design is used in all policy making, but it does not make any policy immune to unforeseen consequences or future problems.

The government might not realize yet that the budget for welfare expenditure will increase if jobs are lost under minimum wage. In removing job opportunities, the minimum wage permanently condemns the least competitive workers to underemployment or unemployment.

When Sec. Cheung cited that capitalist countries such as the United States and Britain have laws for minimum wages, he neglected to mention the welfare classes that have developed there. A welfare class is a group of people that are systematically excluded from the job market and subsist off of the state. Both the U.S. and the U.K. have their own class of citizens that rely on welfare alone to get by. Rest assured these countries employed “careful design” in their minimum wages policies, but it hasn’t stopped their welfare classes from forming.

It is immoral to condemn a whole group in society to CSA for the rest of their adult lives. Our officials don’t seem to understand what’s at stake with a Minimum Wage Bill.

Sec. Cheung is the Sec. of Labour and Welfare, but hasn’t mentioned the welfare costs that could rise post minimum wage. Another example is a question posed to Leung Chun-ying at a recent luncheon: “what will happen when someone loses their job from minimum wage?” Leung replied that there is always welfare. He continued, you have a choice to be on welfare. He might as well have said: “let them eat cake.”

Even the most careful designs have facilitated unforeseen consequences and the examples are numerous. The difference with this Minimum Wage Bill, however, is that typical unforeseen effects have been identified.

Imagine if our Chief Executive Donald Tsang didn’t take his first steps on the career ladder, working for Pfizer in the 1960s and receiving the training necessary to communicate to the public as he does today.

When individuals like our Chief Executive, who the education system has failed and need low paying first jobs for acquiring greater skills, are buried under policies such as minimum wage, the loss is not only borne by the individual, but by society as a whole. Perhaps Sec. Cheung should ask the Chief Executive himself, if he was not able to take the first step on his career ladder, and hence never given the chance to serve the people of Hong Kong today, whose loss would it be?