SCMP Thursday, August 30, 2001

Don't forget the workers

Hong Kong's unemployment problem has taken a turn for the worse. Financial Secretary Antony Leung Kam-chung has been frank enough to admit there is no reason for optimism in the near future and has predicted the economy will remain weak, at least until 2002.
In response, the Government is reportedly poised to launch a 10-point programme to create jobs and revive the economy, including $18 billion in infrastructure projects to boost tourism. It is hoped this will lower the current unemployment rate of 4.7 per cent.
So far, however, official attempts to stimulate the economy have been unsuccessful. Cyberport has created more hype than jobs, and the idea of creating a Chinese-herbal-medicine "port" never even got off the ground. Other long-term projects, such as the Disney theme park, are years away from making meaningful contributions to the economy and attracting foreign investment.
The Government has been urging private enterprises to downsize. Top officials have described the payroll-trimming trend among public bodies as irreversible. In addition, they vow to continue to apply to all government departments the "value-added scheme" whereby civil servants must work longer and be more productive for the same pay. Our officials appear unsympathetic to the plight of ordinary salary earners.
Enterprises, big and small, are striving for greater efficiency and lower costs. The best way to preserve their position is for employers and employees to close ranks and strive for the common goal of survival. To do this, workers should be allowed to participate in the management decision-making process. This could foster better collaboration. Many employees, realising they are in the same boat as their employers, are quite willing to make sacrifices to ease corporate financial burdens.
The most valuable asset at most enterprises is human resources. In a desperate move to cut costs, some companies have handed out layoff notices without even consulting their employees. But in preference to being sacked, many workers are prepared to accept less money or fewer working hours in a collective effort to improve their company's odds of surviving the economic slowdown.
Hong Kong does not have any legislation on collective bargaining. Workers can hardly rely on their unions to reach consensus with their bosses. Often, they have little choice but to swallow employers' unilateral decisions. This has resulted in mistrust between employers and their staff. If these conflicts are not satisfactorily resolved, redundancies are bound to occur in nearly every sector. A sense of insecurity is giving way to widespread frustration, becoming a major source of social instability. This time bomb, though officials might be unaware of it, could explode at any time.
Wages are bound to drop further because of the current oversupply of labour. The Census and Statistics Department says 340,000 workers saw their average monthly salaries shrink to $4,000 in 2000 from $5,000 in 1997. The figure might soon drop below the statutory minimum wage of $3,670 for foreign domestic helpers.
Workers should be allowed to live in dignity. This is the only way to maintain social stability, affirm social justice and instil public confidence in the Government. These are all factors affecting investors' decisions about whether to move to Hong Kong. Left to their own devices, employers are likely to slash workers' pay and benefits further. There are ample reasons for the Government to intervene and prevent matters from spinning out of control.
The Government must take decisive steps to stop employment conditions from deteriorating. Officials have turned a deaf ear to popular demand for minimum-wage legislation. They have also failed to protect workers from overly long working hours. Many family tragedies have already stemmed from the Government's inaction.
Demand on our welfare system has been on the rise, as some workers find it absurd to be exploited by inhumane employers. Mandated minimum wages and maximum working hours would offer better incentives for workers. The resulting increase in productivity could offset any additional costs associated with these protective measures.
Due to pressure from the public and the labour unions, the Housing Department and the Food and Environmental Hygiene Department have introduced a point system for selecting their contractors. Wage levels will be taken into account to prevent contractors from taking advantage of people desperate for jobs. The Housing Department has also taken the lead in requiring security-service providers to adopt eight-hour shifts to ensure their guards do not have to work unreasonably long hours.
But these are small-scale measures. Legislative intervention is needed. Underpaid workers do not make happy consumers. People are having difficulty making ends meet and can hardly afford their mortgage and rental payments. Many are even disinclined to spend on daily necessities.
Critics compare Hong Kong with Shenzhen and conclude local workers are overpaid. They argue there is ample room for downward adjustment of local wages. In reality, however, some SAR residents with monthly incomes of just $3,000 to $4,000 have to spend as much as five to 10 times more than their counterparts on the mainland.
Those in lower-income brackets are not the only ones who feel frustrated. Many in the middle class are worried about the Government's policy of importing professionals from across the border. There is no way for a society to move forward if a substantial portion of its people feel victimised.
The administration will need to think more broadly to tackle the SAR's unprecedented pessimism. Many old-school ideas are no longer relevant. It is high time the fiscal reserves were used to create jobs for those with few skills and qualifications. More aid for the unemployed is in order. Such assistance could bolster the community's consumption and thus the economy in general.
Hong Kong people have not felt so beaten for a long time. In this crucial time for rebuilding confidence, the Government must show it cares.
Albert Cheng King-hon
( ) is a broadcaster and publisher.