Following is a question on population policy and grassroots unemployment by the Hon KP Chan and a written reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung:
There have been comments that Hong Kong is now facing two major problems, namely structural transformation of the economy and unbalanced development of industries, as well as lack of proper complementary measures in respect of employment and livelihood in Hong Kong’s population policy. It was reported that the Provisional Minimum Wage Commission had estimated in its report that around 45 000 people would be dismissed if the minimum wage was set at the level of $28 per hour, 200 000 people would have a reduction in their working hours, and it was also predicted that in future, more low-skilled workers with low education attainment might face the risk of unemployment due to their weak bargaining power. In this connection, will the Government inform this Council:
(a) of the employment and unemployment situation of grass-roots workers in Hong Kong in the next three to five years as projected by the Government; whether the unemployment rate of grass-roots workers will rise further; if not, of the projection made by the Government; if it will, of the trades, positions and age groups that are expected to be hard hit by unemployment, and the counter-measures put in place by the Government;
(b) apart from the six priority industries, whether the Government will develop other industries so as to create more elementary posts; if it will, of the measures to be implemented; if not, the reasons for that;
(c) whether the Government will consider forging partnership with enterprises to develop labour-intensive industries (e.g. logistic support services such as telephone services centres) in labour-intensive places such as Tin Shui Wai and Tung Chung, with a view to creating more job opportunities and on-the-job training for people in those districts; if it will, of the details; if not, the reasons for that; and
(d) whether the Government will, on the premise that family reunion will not be prejudiced, review and assess the implication of the existing population policy on Hong Kong’s future employment situation, with a view to finding corresponding precautionary measures and solutions; if it will, of the details; if not, the reasons for that?
The Administration has always been concerned about the needs of the grassroots and the disadvantaged. The statutory minimum wage (SMW) was introduced to protect grassroots workers. Our aim is to establish an appropriate SMW regime which provides a wage floor to forestall excessively low wages, but without unduly jeopardising our labour market flexibility, economic growth and competitiveness or causing significant adverse impact on employment opportunities for vulnerable workers. To tie in with the implementation of SMW, the Labour Department (LD) will strengthen its employment services to assist, on all fronts, job seekers with special needs or who have difficulties in finding jobs.
My reply to the four parts of the question raised by the Hon Chan Kin-por is set out below:
(a) The figures on layoffs of employees and reduction in working hours in the Report of the Provisional Minimum Wage Commission were only the results of stress tests conducted on the assumption, based on feedback collected by the Commission during the consultation period, that enterprises would absorb 30% of additional wage bills through downsizing. These tests were used to evaluate the risks of job loss and reduction in working hours, and the results were neither precise estimates nor forecasts. While the actual situation would differ from the assumed one, the precise impact would hinge on the economic and employment situations in the next few years, as well as the dynamic effects of interaction between employers and employees after the implementation of SMW. As such, the exact impact of SMW can only be analysed through tracking studies conducted after its implementation, and thus it is difficult to make precise forecasts of unemployment rate at this stage. As for the employment situation of the grassroots labour force, it depends largely on their supply and demand conditions, which are influenced by the economic situation, population and industrial structure, while SMW is only one of the factors at work.
The Labour and Welfare Bureau is conducting a new round of the Manpower Projection (MP) to assess Hong Kong’s future manpower supply and demand at the macro level in the medium term. The MP is expected to be completed in 2011.
LD has been adopting multi-pronged measures to promote labour market efficiency and disseminate vacancy information, with a view to assisting job seekers to enter or re-enter the labour market. In providing support to job seekers of different background who may encounter difficulties in their job search, LD is vigorously implementing various employment programmes, including the Employment Programme for the Middle-Aged, the Work Trial Scheme and the Youth Pre-employment Training Programme & Youth Work Experience and Training Scheme, etc, so as to enhance job seekers’ employability and help them find suitable jobs.
(b) The Administration is committed to promoting economic development, creating job opportunities, and enhancing the employability of the labour force in order to improve the livelihood of the disadvantaged and low-income workers. As such, we have been promoting economic growth through initiating infrastructure projects and encouraging investment. In the past few years, we have actively implemented ten major infrastructure projects, the Kai Tak Cruise Terminal, the expansion of Disneyland, etc., as well as promoted the local community economy and the development of social enterprises, creating many jobs for people from different levels (especially the grassroots).
In addition, the Chief Executive has in his 2007-08 Policy Address highlighted the strengthening of links with the Mainland to tie in with the National 12th Five-Year Plan (the Five-Year Plan). To ensure that Hong Kong can better leverage its advantages during the Five-Year Plan period, we will strive to enhance Hong Kong’s status as an international centre for financial services, trade, shipping and logistics, and strengthen the four traditional pillar industries, i.e. financial services, trading and logistics, tourism, and producer and professional services. We will also seize the development opportunities on the Mainland and develop the six industries where we have comparative advantages, ie testing and certification, medical services, technology and innovation, cultural and creative industries, environmental industries and education services. We will actively develop new markets for Hong Kong’s service industry and bring about new economic growth points for Hong Kong in the long run so as to provide more employment opportunities.
(c) Since the residents of different districts have different needs, the relevant policy bureaux and departments have introduced different district-based measures and programmes to promote the economic development of the districts so as to create employment and on-the-job training opportunities, with a view to helping the disadvantaged.
For example, more than 80% (around 1 000) of the employees of the Housing Department’s contractors for security and cleansing services in public housing estates in Tin Shui Wai (TSW) are local residents. In addition, the Hong Kong Housing Society (HKHS) will develop an Integrated Elderly Community Project at TSW Area 115. As estimated by HKHS, the project will create about 300 jobs during the construction phase and at least 1 200 jobs when the project has been completed. Apart from the creation of job opportunities, the ancillary facilities of the project, such as a hotel, care centre and recreation facilities, will attract more tourists to TSW, injecting commercial activities into the area and bringing a positive impact on TSW’s socio-economic development. As regards the two relevant short-term land use projects, HKHS expects to create about 200-300 job opportunities, including jobs in the construction, elderly services, retail, venue management and exhibition sectors.
LD will also set up a pioneer one-stop employment and training centre in TSW next year with a view to streamlining, integrating and enhancing the existing employment and training/retraining services provided by LD, the Social Welfare Department and the Employees Retraining Board (ERB). Through its 95 training bodies distributed amongst districts (including TSW and Tung Chung), ERB also provides placement-oriented retraining courses, as well as job placement services for trainees who have completed full-time placement-tied training courses.
(d) The objective of Hong Kong’s population policy is to optimise our demographic structure by securing and nurturing a quality population that supports and sustains Hong Kong’s long-term development. We will continue to devote substantial resources to raise the quality of education. We will also spare no efforts in training and retraining the local workforce to ensure that our manpower resources can meet the changing demand of society.