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Hong Kong’s tough social-distancing rules in the first quarter of the year pushed the unemployment rate to 5 per cent in the three months ending in March. Photo: Nora Tam

Hong Kong’s jobless rate rises to 9-month high of 5 per cent as social-distancing curbs put job market under ‘severe pressure’

  • Rolling three-month figure from January to March up 0.5 percentage points amid city’s tough social-distancing restrictions, with 26,900 more people losing their jobs
  • Labour chief Law Chi-kwong says he hopes various relief measures will help boost affected sectors
Hong Kong’s tough social-distancing rules in the first quarter of the year pushed the unemployment rate to 5 per cent in the three months ending in March, the highest in nine months.

The jobless rate was up 0.5 percentage points in the rolling period from January to March, compared with 4.5 per cent in the period from December to February, according to provisional figures the Census and Statistics Department released on Thursday.

The unemployment figure was 5.4 per cent in the April to June period last year.

Secretary for Labour and Welfare Law Chi-kwong. Photo: SCMP

From January to March, Hong Kong imposed some of its tightest social-distancing restrictions yet as it battled a surge in coronavirus infections.

Thirteen types of premises were ordered to suspend operations amid the city’s fifth Covid-19 wave. They were: amusement game centres, fitness centres, public entertainment venues, beauty parlours, karaoke establishments, mahjong-tin kau premises, swimming pools, bathhouses, places of amusement, party rooms, night clubs, massage establishments and sports facilities.

Secretary for Labour and Welfare Law Chi-kwong said the labour market was under “severe pressure” but that he hoped various relief measures would help boost affected sectors.

“While the labour market will still be subject to pressure in the near term, with the easing of the local epidemic situation of late, together with the launch of a new round of consumption vouchers, business in the consumption-related sectors should gradually improve and thus support employment in these sectors,” Law said.

Unemployment in sectors heavily affected by social-distancing rules, such as catering and retail, remained high.

The jobless rate in the food and beverage sector increased by 2.6 percentage points to 11 per cent, while the figure for the retail sector rose by 1.4 percentage points to 7.7 per cent.

In the first quarter, 26,900 more people lost their jobs, leaving 188,500 people without work, compared with 161,600 in the same period ending in February.

The number of underemployed people also increased by about 27,800 from 89,200 in the previous three-month rolling period ending December to 117,000 in the first quarter.

Hong Kong jobless rate hits five-month high of 4.5 per cent

The first quarter of this year marked the city’s worst coronavirus outbreak so far, accounting for the bulk of more than 1 million confirmed cases and more than 7,800 deaths as of March 31.

Iris Pang, chief Greater China economist at financial services firm ING, said the coming unemployment data for April could be higher.

“Though relaxation of social-distancing measures will help the job market, health experts have warned the Covid-19 wave could come back in June when summer holidays and the spending seasons begin,” she said. “The unemployment number could increase if the Hong Kong government chooses to lock down [by closing businesses] again.”

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Separately, figures released by the Social Welfare Department on Thursday showed a small monthly increase in the number of people receiving Comprehensive Social Security Assistance (CSSA).

The CSSA caseload at the end of March stood at 216,688, up from 216,446 in February.

To help ease the burden on the battered workforce as a result of the stringent pandemic-control measures, the government announced two sets of relief schemes in March to subsidise wages and offer temporary support to those who had lost their jobs.

The Temporary Unemployment Relief scheme provides a one-off payment of HK$10,000 (US$1,280) three to four weeks upon approval for those who have lost their jobs or were asked to temporarily stop working as a direct result of social-distancing measures. More than 470,000 people have applied for the scheme, exceeding the government’s estimation that 300,000 people would register.

‘How will we survive?’ firms ask after Hong Kong extends Covid curbs until April

Meanwhile, an additional HK$12 billion will be spent on a new round of the Employment Support Scheme, which has undergone major changes to expand eligibility.

Under the scheme, employers can receive up to HK$8,000 a month per eligible worker for three months, less than the maximum of HK$9,000 a month for half a year under the previous round of the scheme.

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