Jobless chef among 162,000 left behind as calls for social insurance grow louder in Hong Kong’s pandemic relief efforts

Fung Chun-wai recently lost his job as a chef at a four-star hotel in Hong Kong. “I am the only breadwinner in my family,” said the 34-year-old. “My wife is a homemaker who takes care of our two small children. I have no job, no income and the government has done nothing to help me.” He is among the 162,200 Hongkongers who were displaced in the first quarter as the local economy cracked under months of anti-government protests and the coronavirus outbreak. The jobless rate rose to a nine-year high of 4.2 per cent in March as thousands of jobs disappeared from the retail, hotel, tourism, and food and beverage, and finance industries. Union leaders and lawmakers are urging the Hong Kong government to consider implementing a state-run unemployment insurance scheme to help people like Fung overcome the crisis. Bill Tang Ka-piu of the Hong Kong Federation of Trade Unions, has urged the government to give an immediate payout to the city’s rank of unemployed. Not many people would qualify for benefits under the city’s existing safety-net system known as the Comprehensive Social Security Assistance (CSSA), including those who have savings or own property, he added. Coronavirus: Fitch downgrades Hong Kong as pandemic poses ‘economic shock’ The CSSA disqualifies applicants who have more than HK$22,000 per person in bank savings, insurance policies, investment or property for a family, or HK$88,000 for a household of four. This applies even if the property is on mortgage. The government on April 9 announced a HK$137 billion (US$17.7 billion) pandemic relief package to help small firms stay afloat, including a scheme to pay for half of the staff’s monthly salary up to a maximum of HK$9,000 for six months. However, it does not cover those who have lost their jobs. Business sector lawmaker Peter Shiu Ka-fai, who represents the wholesale and retail sector, said a government-run unemployment insurance programme for workers may be overdue given the state of job market now. Like most employees’ provident funds, an unemployment insurance coverage could entail voluntary monthly contributions to a pool, which can be disbursed in rainy days, he added. The Hong Kong government considered the feasibility of such a scheme in 2000, but concluded that the CSSA — launched in 1993 — was adequate to assist the unemployed, elderly and the disabled. The spiral of job losses this year has led to a surge in CSSA applications, according to government data. The CSSA programme covered 14,647 unemployment cases in March, an 11 per cent increase over February, and a quarter more than in the same month last year. A record 48,789 unemployed people accessed the CSSA in May 2003 when the jobless rate hit a record 8.5 per cent in the aftermath of the Sars (severe acute respiratory syndrome) outbreak. Despite its good intentions, the unemployment insurance scheme to complement the CSSA is facing resistance from within the government. “Any system meant to cover everyone in our workforce must be mandatory in nature and that will take time for us to have the relevant legislation in place and subsequently have the system built,” Law Chi-kwong, Secretary for Labour and Welfare Law, said in a radio broadcast on April 19. The government’s recently-announced wage subsidy scheme covers most of the workforce, Law said, adding that the CSSA provides a safety net to families in such financial distress. State-run unemployment insurance schemes in the US or Europe pay the jobless up to 61.3 per cent of their last drawn salary, the International Labour Organisation said in a report last October. Those in the emerging economies can get about 10.6 per cent of their last-drawn salary. These schemes usually require employers and employees to contribute between three and eight per cent of a staff’s monthly salary together with government funding to form a pool, the report said. With the chances of a government-run unemployment scheme unlikely to happen any time soon, private insurance companies could jump in and offer such coverage to meet demand. Eric Hui Kam-kwai, chief executive of Zurich Insurance (Hong Kong), said the insurer would consider launching unemployment insurance policies to fill the void in the market. The firm introduced a similar policy in 2002 but failed to gain traction. “A lack of unemployment insurance cover is because the unemployment rate in Hong Kong has never been very high,” Hui said. “However, the spiralling of unemployment rate recently may well be a catalyst for a change.”