Will unemployment become a ‘new normal’ in HK?
Winter is coming. Although the business sentiment in Hong Kong rose to a 30-month high in October, the unemployment rate is projected to spike around Christmas, after the government’s Employment Support Scheme wage subsidies program ends in November for 135,000 eligible employers. Cathay Pacific Airways’ massive layoff of nearly 6,000 staff in Hong Kong, coupled with some 1,000 more from cash-strapped travel agencies, will make the winter of 2020 chillier than ever.
The unemployment rate in Hong Kong hit 6.4 percent in the third quarter of this year, the highest in nearly 16 years. The city’s jobless population amounts to nearly 300,000, a record high far surpassing that during the onslaught of SARS in 2003. People in Hong Kong, possibly the most workaholic in the world, are struggling to keep their jobs and preparing for the worst, being ready to venture onto a new career path to wade through the plight. Tour guides dropped their flags and carried bags as delivery men; former aircrew received a warm welcome in vocational training schools; shopkeepers closed their street shops and tapped the virtual business online.
With resilience and resourcefulness, the city is steering toward a “new normal” in a post-pandemic era.
Youth unemployment has been a social concern for years. Think tanks, including Our Hong Kong Foundation, warned that the youth group might have been seriously affected during the COVID-19 pandemic. However, the updated statistics released by the special administrative region government suggest that youth weren’t the hardest hit by job losses.
The number of middle-aged (55-59) jobless people surged a shocking 200 percent in the third quarter year-onyear, while those in their late 30s lost jobs at a 157 percent higher rate. The youth group (25-29) increase was 109 percent, the smallest of the three categories.
The numbers indicate that people close to retirement age were severelyhit by the pandemic, and who, after being sacked, might be forced to retire early as they are the least competitive in the job market. In this regard, Hong Kong is accelerating its pace to be a fully-fledged aged society not because of the demographic figures, but resulting from the dramatic rise in the number of jobless 50-somethings amid the waves of the pandemic. If the city fails to secure enough job opportunities for the gray-haired workforce, the unemployment of that age group will stand around the current 30.6 percent, the “permanent legacy” of COVID-19.
Compared with the late-50 s age group, the younger jobless workers will be more flexible and more competitive when seeking new employment. The monthslong pandemic has forced Hong Kong, a financial and trade center, to embrace a structural transformation of its pillar industries. The city, with the past glory of facilitating exchanges of commodities and funds, is now tapping its potential in innovation and incubating its booming start-up ecosystem.
A Hang Seng Bank outlet in Wan Chai, for example, was one of the first commercial places reshaped and renovated into a chic co-working space for start-ups despite the months of street violence in 2019 that reduced a hustleand-bustle city center into a no-man’s land, especially on Sundays and public holidays. Local start-ups rose against the tide of the double whammy of social unrest and pandemic and maintained strong momentum by tapping the rising city cluster in the Guangdong-Hong Kong-Macao Greater Bay Area. Hong Kong recorded 21 percent annual growth in the number of startups last year — a remarkable achievement under the backdrop of social chaos and chronic street violence.
In 2020, Hong Kong has secured its prominent status in the global start-up ecosystem as the third most innovative place in Asia and Oceania, and among the top 25 start-up hubs in the world, according to Global Start-up Ecosystem Report. The start-ups, growing by leaps and bounds, have contributed over a 31 percent increase in the employment rate, and the number of employees has risen to 12,478, most of whom are in their 20s and 30s.
The multicultural environment in Hong Kong creates tangible benefits: The multicultural group of founders constitutes the backbone of the evergrowing start-up ecosystem in the place where the East meets the West. The stakeholders and builders are from different countries with various cultural backgrounds, and more than one-third of the founders in Hong Kong are non-locals from diverse territories including the United States, the United Kingdom, Australia, Germany, and more.
When the entrepreneurs from all over the world swarm to Hong Kong and cooperate with the openminded ready-to-go local youth to explore their novel and innovative business not only in Hong Kong but also in peripheral areas including Southeast Asia and the Bay Area, the economic landscape in Hong Kong will certainly take a new shape that generates both job opportunities economic upgrading, which, in turn, will benefit residents of every age group. The government should ride the tide without throwing the veteran greyhair workforce under the bus.
It can be estimated that the coexistence of strong, big international conglomerates and a large herd of small-scale vigilant and professional start-ups will jointly shape the new economic landscape in Hong Kong. As such, unemployment should not be the new normal in a free and resilient economy such as Hong Kong. With the spirit of perseverance and valiance, the people of the “Pearl of the Orient” will overcome all kinds of adversities with wits and wills.