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Overall Wage and Payroll Statistics
According to the figures released today (March 24) by the Census and Statistics Department (C&SD), the average wage rate for all the selected industry sections surveyed, as measured by the wage index, increased by 3.3% in nominal terms in December 2010 over a year earlier.
About 65% of the companies reported increase in average wage rates in December 2010 compared with a year ago, up from 55% in September 2010. On the other hand, 29% of the companies recorded decrease in average wage rates over the same period, down from 37% in September 2010. The remaining 6% reported virtually no change in average wage rates.
After discounting the changes in consumer prices as measured by the Consumer Price Index (A), the overall average wage rate for all the selected industry sections surveyed decreased by 0.3% in real terms in December 2010 over a year earlier.
As for payroll, the index of payroll per person engaged for all the industry sections surveyed increased by 3.1% in nominal terms in the fourth quarter of 2010 over a year earlier.
After discounting the changes in consumer prices as measured by the Composite Consumer Price Index, the average payroll per person engaged increased by 0.3% in real terms in the fourth quarter of 2010 over a year earlier.
The wage rate includes basic wages and other regular and guaranteed allowances and bonuses. Payroll includes elements covered by wage rate as well as other irregular payments to workers such as discretionary bonuses and overtime allowances. The payroll statistics therefore tend to show relatively larger quarter-to-quarter changes, affected by the number of hours actually worked and the timing of payment of bonuses and back-pay.
Sectoral Changes
For the nominal wage indices, year-on-year increases ranging from 1.5% to 4.4% were observed in all selected industry sections in December 2010 except the manufacturing section, in which a year-on-year decrease of 1.0% was recorded.
For the real wage indices, year-on-year increases of 0.8% and 0.9% were observed in the import/export, wholesale and retail trades; and personal services sections respectively in December 2010. On the other hand, year-on-year decreases of 0.2% to 4.4% were recorded in the manufacturing; transportation; accommodation and food service activities; financial and insurance activities; and real estate leasing and maintenance management sections. The real wage index for the professional and business services section remained virtually unchanged when compared with that in December 2009.
The year-on-year changes in the nominal and real wage indices for the selected industry sections from December 2009 to December 2010 are shown in Table 1.
As for the nominal indices of payroll per person engaged, year-on-year increases ranging from 0.7% to 12.5% were observed in the manufacturing; sewerage, waste management and remediation activities; import/export and wholesale trades; retail trade; transportation, storage, postal and courier services; accommodation and food service activities; financial and insurance activities; and professional and business services sections in the fourth quarter of 2010. Meanwhile, the information and communications; real estate activities; and social and personal services sections recorded decreases of 0.1% to 1.2% over a year earlier.
For the real payroll indices, year-on-year increases of 2.0% to 9.5% were recorded in the import/export and wholesale trades; retail trade; and financial and insurance activities sections in the fourth quarter of 2010. Yet for the manufacturing; sewerage, waste management and remediation activities; transportation, storage, postal and courier services; accommodation and food service activities; information and communications; real estate activities; professional and business services; and social and personal services sections, decreases ranging from 0.1% to 3.9% were recorded.
The year-on-year changes in the nominal and real indices of payroll per person engaged for selected industry sections from the fourth quarter of 2009 to the fourth quarter of 2010 are shown in Table 2. The quarterly changes in the seasonally adjusted nominal and real indices of payroll per person engaged between the fourth quarter of 2009 and the fourth quarter of 2010 are shown in Table 3.
Commentary
A Government spokesman said that the year-on-year increases in average wage rate and payroll per person engaged showed some acceleration, in tandem with continued improvement in the economic and labour market situation. As the wage increase broadly matched the pick-up in inflation rate over the period, there was only a marginal decline of 0.3% in real terms in December, albeit improved from the decline of 0.8% in September.
The spokesman further pointed out that payroll per person engaged, as an indicator of the average income of workers including overtime and other irregular payments, rose marginally by 0.3% in real terms in the fourth quarter, reversing the 1.5% decline in the third quarter.
Other Information
Both wage indices and payroll indices are compiled quarterly based on the results of the Labour Earnings Survey (LES) conducted by the C&SD.
Wage statistics are conceptually different from the payroll statistics. Firstly, wage rate for an employee refers to the sum earned for his normal hours of work. It covers basic wages and other regular and guaranteed allowances and bonuses, but excludes earnings from overtime work and discretionary bonuses, which are however included in payroll per person engaged. Secondly, the payroll index of an industry is an indicator of the simple average payroll received per person engaged in the industry. Its movement is therefore affected by changes in wage rates, number of hours of work and occupational composition in the industry. In contrast, the wage index of an industry is devised to reflect the pure changes in wage rate, with the number of hours of work and occupational composition between two successive statistical periods being kept unchanged. In other words, the wage index reflects the change in the price of labour. Thirdly, wage index only covers employees up to the supervisory level (i.e. not including managerial and professional employees), whereas payroll index covers employees at all levels and proprietors actively engaged in the work of the establishment. Because of these conceptual and enumeration differences between payroll and wage statistics, the movements in payroll indices and in wage indices do not necessarily match closely with each other.
It should also be noted that different consumer price indices are used for compiling the real indices of wage and payroll to take into account the differences in their respective occupation coverage. Specifically, the Composite Consumer Price Index, being an indicator of overall consumer prices, is taken as the price deflator for payroll of workers at all levels of the occupational hierarchy. The Consumer Price Index (A), being an indicator of consumer prices for the middle to lower income groups, is taken as the price deflator for wages in respect of employees engaged in occupations up to the supervisory level.
Furthermore, industries covered in the LES are classified according to the "Hong Kong Standard Industrial Classification (HSIC)". Upon implementation of the new Hong Kong Standard Industrial Classification Version 2.0 (HSIC V2.0) by the C&SD in October 2008, the LES has been enhanced to adopt HSIC V2.0, in place of HSIC V1.1, in classifying the industries of surveyed establishments. All the wage and payroll statistics from the first quarter of 2009 onwards, unless otherwise specified, are compiled based on HSIC V2.0. The series of wage and payroll indices under HSIC V2.0 have also been backcasted to the first quarter of 2004.
Detailed breakdowns of the payroll and wage statistics are published in the "Quarterly Report of Wage and Payroll Statistics, December 2010". Users can download this publication free of charge at the website of the C&SD (www.censtatd.gov.hk/products_and_services/products/publications/statistical_report/labour/index.jsp). Print version of this publication is available for sale at HK$64 per issue. Purchase can be done in person at the Publications Unit of the C&SD (Address : 19/F Wanchai Tower, 12 Harbour Road, Wan Chai; Tel. : 2582 3025) or through mail order by returning a completed order form which can be downloaded from the C&SD's website (www.censtatd.gov.hk/products_and_services/other_services/provision_of_stat/mail_ordering_of_publications/index.jsp). Print version of this publication is also available for sale online at the Government Bookstore of the Information Services Department (www.bookstore.gov.hk).
For enquiries on wage and payroll statistics, please contact the Wages and Labour Costs Statistics Section (1) of the Census and Statistics Department at 2887 5550.
Ends/Thursday, March 24, 2011
Issued at HKT 16:32
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