The hard labour of beating youth unemployment

Hong Kong must equip its young people to take advantage of growing labour shortages in industries from construction to IT, experts argue

PUBLISHED : Friday, 18 October, 2013, 10:52pm
UPDATED : Saturday, 19 October, 2013, 3:08am

Chan Kwok-chin sees little cause for optimism. At the age of just 18, he already feels society has let him down.

After missing out on university by failing his Diploma of Secondary Education exams and getting an earful from his parents, he took a job as a waiter, earning a "few hundred dollars" a week, to prove he wasn't a washout. That didn't last long.

Since being fired from the restaurant for "not knowing how to speak to customers properly", he has scrambled to earn a living by buying and selling comic book figurines online.

"I was born poor so there's not much I can do," he says.

Chan's story is a familiar one. According to the latest labour force statistics, Hong Kong's seasonally adjusted unemployment rate of 3.3 per cent marks another quarter of full employment. But the much higher 9.4 per cent unemployment rate for Hongkongers aged 15 to 24 is a telling sign that there are serious structural issues that need addressing.

What makes the figure frustrating is the fact that many industries are short of skilled employees and offer plenty of opportunities - at least for those who are prepared to work hard.

Yeung Wai-yip is a prime example. Unlike Chan, he followed the traditional, academic route to success. After graduating from the University of Science and Technology with a degree in finance, he expected to walk into a stable job in the city's most lucrative industry.

But that was in 2008, as the financial crisis reached its peak. Jobs were few and far between.

Today, Yeung has a stable, well-paid job that he enjoys and says has room for career development, but not at a bank. Instead, he joined his father, a bar-bender, as an apprentice.

"It's good money," he says. "I don't see why people want to stay in finance when there is not a lot of room for career development."

For many young people, it's a different story. Provisional figures released by the Census and Statistics Department last month revealed a 15.3 per cent unemployment rate in August among those aged 15 to 19 compared to 6.6 per cent unemployment for those aged 20 to 29.

Recent figures from the Hong Kong Council of Social Service showed the poverty rate for the 15- to 24-year-olds to have increased from 17.5 per cent of the population to 17.7 per cent between 2011 and 2012. That means nearly 200,000 youngsters are now officially living in poverty.

The dire picture is also reflected in the growing number of 15- to 24-year-olds claiming Comprehensive Social Security Allowance (CSSA), the city's catch-all welfare net. They make up 5.4 per cent, or 46,000, of claimants.

With the government under pressure to come up with concrete measures on poverty after setting the city's first poverty line last month, young people seem the obvious place to start.

While tackling youth unemployment may not help alleviate poverty directly, experts say it could steer young people away from being ensnared in the intergenerational poverty trap.

Chief Secretary Carrie Lam Cheng Yuet-ngor, who chairs the government's Commission on Poverty, says the best way to lift people out of poverty is to create employment opportunities, particularly good-quality jobs to help the upward mobility of young people.

But the key is whether youngsters would be willing to invest in their own life careers.

"Coming up with better youth employment policies is not so much a poverty alleviation measure; it is a poverty prevention measure," said Federation of Youth Groups supervisor Gary Tang Leung-shun.

Clement Chen Cheng-jen, chairman of the Vocational Training Institute, puts the unemployment figures down to two systemic problems: a mismatch between young people - particularly those straight out of secondary school - and entry-level jobs with decent pay, and a skills mismatch between young people and professional careers.

"Dozens of trades in Hong Kong are just screaming for labour but youngsters do not want to enter them because starting salaries are too low and they see no future in them," said Chen, who also heads the Commission on Poverty's education, employment and training taskforce.

Dozens of trades in Hong Kong are just screaming for labour but youngsters do not want to enter them because starting salaries are too low and they see no future in them

"Youths often take on menial office jobs which pay HK$8,000 or HK$9,000 a month but they can never make a career out of it," Chen said. "They do not want to start from scratch and learn a trade for a life career."

Chen says there are manpower shortages for construction workers, aircraft mechanics, watch repairmen, electricians, elevator repairmen and inspectors, and even harbour pilots. Most of the jobs, he says, offer stable careers but require starting off at low wages or long training as an apprentice. "The government spends too much on tertiary education and not enough on technical or vocational education … there are so many opportunities that can be created for non-engaged young people."

According to a projection by the Labour Department in 2010, the stock of skilled tradesmen, craftsmen and technicians is expected show a deficit of 22,000 by 2018.

In part, this reflects an overall shortage in manpower as baby-boomers leave the workforce and bosses struggle to recruit staff with higher qualifications for jobs that would once have been filled by school leavers.

And there is no sign of demand letting up. The construction sector continues to grow, bolstered by large-scale developments at the former Kai Tak airport, the Hong Kong-Zhuhai-Macau Bridge and the Sha Tin to Central railway link. The industry's manpower needs are expected to grow at 1.9 per cent annually up to 2018.

Utilities companies providing electricity, gas, water and waste management services also expect to recruit more staff as the government steps up efforts to provide more homes.

Another industry that could, perhaps more surprisingly, find itself short of skilled staff is information technology.

Tang said the stock of skilled IT technicians is drying up. "After the IT bubble burst, many young people actually believed there would be a massive shrinkage in demand for IT jobs and interest in training programmes for computer science or programming dropped … but the fact is, almost all companies in Hong Kong need skilled IT technicians to maintain and run their systems," Tang said.

He believes young people have a narrow perception of the available jobs. Even among those who go on to higher education, the most popular degree programme remains the ubiquitous Bachelor of Business Administration, as many see becoming a "business professional" as the only route to success, he said.

"Youths must understand that Hong Kong is not just about business and part of that requires the government telling them Hong Kong will not just be a financial centre in the future," Tang said.

But So Yu-hang, who manages a construction company and heads the Hong Kong and Kowloon Scaffolders General Merchants Association says today's young people are "afraid of hard work".

"What kid would want to break their backs in the heat when they could be a security guard for HK$11,000 a month?" he said.

He blames the government for failing to support the trade's traditional apprenticeship programmes, in which scaffold masters could take apprentices under their wing. Instead, citing safety and liability concerns, it favours accredited schemes.

A nascent scaffolding apprenticeship scheme which began earlier this year in conjunction with the Construction Industry Council failed to attract a single applicant, So said.

He added average starting wages in the construction industry are about HK$500 to HK$800 a day, depending on skill level - more than most graduate clerical jobs pay. Those who do well usually go on to start their own contracting companies.

"The problem is that poor youths don't have skills or education but are also reluctant to engage in hard labour," So says. "There's nothing we can do to change this mindset."

One factor that does not help is that the trend of youth unemployment is global. According to a recent International Labour Organisation report, as many as 73 million people aged 15 to 24 worldwide are out of jobs and unable to find work. The situation is made worse by Europe's economic woes.

With an estimated global youth unemployment rate of 12.6 per cent, the ILO has warned of a "'scarred' generation of young workers facing a dangerous mix of high unemployment, increased inactivity and precarious work in developed countries".

John Sayer, former director general of Oxfam Hong Kong and now an international development consultant, said poverty in developed countries tends to lead to growing social problems if left unabated.

"We see that in more unequal developed economies there are higher levels of crime, higher levels of teenage pregnancy, higher levels of illness and higher levels of people going to prison," he said.

"Hong Kong hates being compared to Singapore … but Singapore does have a more robust and comprehensive employment and industrial strategy than Hong Kong," Sayer adds, pointing to the city state's recent introduction of high-value-added, hi-tech industries such as petrochemicals and aerospace.

Tang agrees. He said the government must invest in and plan for the development and training of workers for future industries.

"When the time comes and you don't have enough trained and skilled labour for the certain type of industry, you can't just pluck workers out of thin air or create more births.

"If the public does not have an idea of what the city's long-term economic development will be like, they would most likely not plan for their own long-term career development either."

Dr Law Chi-kwong, a social work professor at the University of Hong Kong, said there was a perpetual "cultural interplay" between parents and the government, who together reinforced the idea among young people that it was either tertiary education or a life of hardship. Only 20 per cent of the city's secondary school graduates get into a university degree programmes.

"Our schools system has created many failures. A lot of young people lack confidence when they leave school," said Law, a member of the Commission on Poverty and head of its Community Care Fund task force.

With economic growth set to slow in the coming years, Law says many youngsters look at people in their 30s still stuck at the lower rungs of the hierarchy and feel they will have a long wait to progress. He cited intergenerational poverty as a serious issue in Hong Kong.

"In Hong Kong, families like to invest in their children a lot because that is their hope. But when they see no hope for their children to leave poverty, what do you expect the family to do?" said Law. "The idea of hope for young people is something rather remote purely in an economic sense. But people can only hold on to their hopes if they have confidence. Building up confidence starting at schools is very important."