SCMP Saturday, September 1, 2001
Unemployment could top 5pc, warn unions
Hong Kong's jobless rate could top five per cent as the economic slowdown worsens, unions and scholars warned yesterday.
Union leader and lawmaker Lee Cheuk-yan said: "If there are no big moves by the Government, it's almost certain the jobless rate will shoot up further, probably to more than five per cent.
"If nothing is done now, the consequences will be serious."
The latest unemployment rate stands at 4.7 per cent, representing 165,000 people out of work.
Mr Lee, general secretary of the Hong Kong Confederation of Trade Unions, urged the Government to spend money to create more jobs and restore people's confidence.
Charges on sewerage and water, and fuel taxes should be frozen to minimise business costs and prevent mass lay-offs of workers, he said.
The confederation wants to see a $10 billion training fund to be set up to provide allowances to workers who opt to upgrade their skills.
Mr Lee warned that the sagging economy and structural change towards a knowledge-oriented economy would leave low-skilled workers more vulnerable to unemployment.
Economics professor Francis Lui Ting-ming, of Hong Kong University of Science and Technology, estimated economic growth for this year would be between zero and 0.5 per cent, against the Government's prediction of one per cent growth.
Professor Lui said that while the Government pointed to dwindling exports as the main reason for the economic setback, more attention should be paid to the internal structural changes. "The impact of globalisation is forcing us to go towards a knowledge-based economy, but the process . . . leaves a large number of low-skilled workers redundant," he said.
Professor Lui agreed the unemployment rate could increase by the end of the year to more than five per cent.
Even if the US economy picked up a bit early next year, Hong Kong GDP would not increase significantly, he said.
To further trim costs, corporations might target middle-ranking workers, Professor Lui said.
In the long run, he said, many low-skilled workers needed re-training, but the "cruel reality" was that most of them could face unemployment due to the workings of the free market economy.
Lawmaker Leung Fu-wah, vice-chairman of Hong Kong Federation of Trade Unions, was less pessimistic and predicted the economy would pick up as the situation in the US improved early next year.
The way forward, he said, was for the Government to make use of all opportunities to retrain and create jobs for low-skilled workers. He cited the government initiative of promoting the employment of local domestic helpers.
He said workers could be retrained in tourism-related fields- such as the hotels and catering industries - because the sector was booming and showed little sign of slowing down.
"This way, we may be able to save some of them," he said.