Hong Kong unemployment rate will hit highest level in nine years, warns the city’s financial secretary

Hong Kong unemployment rate will hit highest level in nine years, warns the city’s financial secretary

As the novel coronavirus (COVID-19) pandemic poses disruption to the global economy, Hong Kong’s financial secretary Paul Chan Mo-po on Sunday (15 March) warned that the city’s unemployment rate, set to be announced this week, will hit the highest level in nine years.

Unemployment will hit the catering, retail, hotel, and construction sectors hardest during the outbreak, he added.

Mr Chan also noted that many companies have shortened their operation hours or even suspended their operations.

In addition to making adjustments to business hours, firms have also implemented pay cuts, retrenched part of their workforce or asked staff to take unpaid leave — all of which will increase the unemployment and underemployment rate in Hong Kong.

Employees’ income will also be reduced as a result of such measures.

Mr Chan suggested increasing public spending to mitigate the above problems, noting that the Hong Kong government had prepared a number of infrastructure projects to be launched once the funding requests are approved by the city’s legislature.

He said that around 7,700 jobs and 37 projects amounting to HK$50.1 billion (S$9.17 billion) were approved by the Public Works sub-committee so far. However, the said projects are pending clearance by the Finance Committee due to the legislature’s filibustering problem.

Filibustering entails the action of one or more members of a legislature debating over a proposed piece of legislation for the purpose of delaying or entirely preventing a decision being made on the proposal.

“If they can be passed by the legislature as early as possible, it can ease the unemployment pressure and also spur other sectors in the economy to growth,” Mr Chan said.

He urged opposition parties to stop filibustering and approve the government’s economy-boosting measures in the legislature as early as possible to ensure Hong Kong’s economic stability while fighting against the spread COVID-19.

Last month on 26 February, Mr Chan announced that the Hong Kong government will be making cash payouts of HK$10,000 (S$1,795.41) to the city’s seven million permanent residents in order to tackle the economic downturn due to the outbreak.

Permanent residents aged 18 or above will benefit from the cash gift while boosting local consumption and alleviating their financial burden, according to Mr Chan.

This measure will cost the government roughly HK$71 billion (S$ 12.72 billion) out of the total budget amount, which is HK120 billion (S$215 billion) in providing support for the economy.

China Daily Hong Kong reported last month that Hong Kong’s unemployment rate is expected to hit 3.6 per cent, the highest since June 2011, based on a survey by economists.

Previously, it was reported that the city’s unemployment rate had risen to 3.4 per cent in the period of November 2019 to January 2020, resulting in the highest rate recorded since 2016.

The SARS outbreak in 2003, however, brought the worst impact to Hong Kong’s unemployment rate, with an all-time high of 8.5 per cent in June 2003, South China Morning Post (SCMP) reported.

A legislator and member of the Federation of Trade Unions Michael Luk Chung-hung called upon the HK government to introduce unemployment allowance scheme while creating temporary jobs and offering more retraining programmes for the workers.

In Singapore, Workers’ Party chairman Sylvia Lim has similarly urged the government to introduce unemployment insurance to ensure the workers’ financial stability.

Highlighting the necessity of unemployment insurance, Ms Lim said in Parliament last month: “Today’s economic climate illustrates how such insurance could provide a stabiliser to workers, to soften the cliff-edge that they face with job disruption.”

“If the anxiety of citizens is not taken seriously enough, the door to populism and nativism will widen,” she said.

The citizen unemployment rate has increased to 3.3 per cent last year from 3 per cent in 2018, according to a recent labour market report released by Ministry of Manpower (MOM).

The unemployment rate for Singapore residents — namely citizens and permanent residents — has increased to 3.1 per cent last year from 2.9 per cent in 2018.

The overall unemployment rate, including both foreigners and residents, increased to 2.3 per cent last year, from 2.1 per cent in 2018.

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