Hong Kong jobless rate worsens to 7 per cent in January as coronavirus fourth wave takes toll
- Labour chief Law Chi-kwong blames worsening labour market on fourth wave of infections which started in November
- Market will remain under pressure in the near term as it will take time for economic activities to return to normal, he warns
The rolling quarterly unemployment rate between November and January was 0.4 percentage points higher than the 6.6 per cent recorded in the three months ending December 31, according to the Census and Statistics Department on Thursday.
Some 7,500 more people were out of work as of January 31, bringing the total to 253,300, the highest since October 2004.
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“Although the fourth wave of the local epidemic has shown signs of easing lately, the labour market will remain under pressure in the near term as it will take time for economic activities to return to normal,” he said.
The underemployment rate jumped 0.9 percentage points to a record high of 6.6 per cent.
The unemployment and underemployment rate for food and beverage service activities increased visibly to 14.7 per cent and 10.0 per cent respectively.
Law said labour market conditions in most other sectors also deteriorated, particularly in education and arts, entertainment and recreation.
The new unemployment high since 2004 dials up the pressure on the government to introduce measures in support of city jobs and those without work, with Financial Secretary Paul Chan Mo-po to deliver his annual budget next Wednesday.
The Hong Kong General Chamber of Commerce, Chinese Manufacturers’ Association of Hong Kong and small- and medium-sized enterprises are among those pressing officials to revive the HK$81 billion Employment Support Scheme, which distributed wage subsidies to businesses and expired in November.
The government previously and explicitly said the scheme would not be repeated, while Law last week rejected labour unions’ appeals for a temporary unemployment fund and other relief payments.
In remarks that angered the unions, Law asked the jobless to instead apply for regular social welfare aid through the Comprehensive Social Security Assistance Scheme (CSSA).
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Mung Siu-tat, chief executive of the Hong Kong Confederation of Trade Unions, said Law must now respond to the soaring unemployment rate with action.
“The figure lags behind in reality and will keep rising,” he said. “There is no more excuse not to help out the unemployed.”
Only one in 20 unemployed people successfully applied for CSSA in December, underlining the high barriers to those seeking help under the scheme, Mung added.
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Law on Thursday encouraged jobseekers to visit the Labour Department’s online platform for vacancies, where he said 43,139 private sector jobs were advertised in January, 1.6 per cent higher than in December.
Kelvin Lau Kin-heng, Standard Chartered Bank’s Greater China senior economist, said even though Covid-19 rules on social distancing were relaxed on Thursday, consumer spending would not rebound immediately and prevailing job insecurity would linger for months.
“The unemployment rate will hover at high levels or even rise further in coming months,” he said.
Meanwhile, property developer New World Development will create 1,000 jobs, some with a monthly pay of up to HK$100,000 to help boost the economy. The new jobs will range from mask production to heritage conservation and social media.
“We are creating nearly 1,000 jobs for people in Hong Kong to not only support the group’s long-term growth, but also create opportunities and a sense of hope, especially for those who have been made unemployed or who are experiencing difficulties in searching for a job,” executive vice-chairman and CEO Adrian Cheng Chi-kong said.
He believed skills in sectors hit hard by the pandemic, such as travel, retail and hospitality, could be transferred to the new positions, which include travel development strategists, nurses, pharmacists, wealth management consultants, chefs, engineers, security guards and roles in digital media, online promotion, marketing, occupational health and safety, property management and customer services.
