Unemployment in Hong Kong

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Introduction

The unemployment rate became a hot topic in the past few months when it rose to

3.5 per cent, a recent high for almost 10 years. The jobless rate was higher

than the 3.2 per cent unemployment rate recorded in the May to July period. The

underemployment rate in the June to August period rose to 2.5 per cent from 2.3

per cent in the May to July period. Until recently, most workers who lost their

jobs were from the manufacturing sector. They were middle-aged factory workers

with few skills and little education. But in recent months a large number of

employees have been laid off in the retail and restaurant businesses.

Unemployment has spilled over to the service sector from manufacturing sector.

Hong Kong is facing a prolonged economic downturn.

The high unemployment rate has raised many social and economic problems. For

example, the number of people who commit suicide is increased. It is because

more people had lost their jobs for a long time. It is a serious threat to the

lives of the poor. The unemployed people may also feel that it is unmeaningful

to live. As a result, they will commit suicide to solve the problem. Moreover,

the high unemployment rate results in the increase of the rate of crime. There

was an unemployed man who stole rice because he was too hungry and he did not

have money to even buy food! We can know how serious the unemployment rate is.

By the way, higher unemployment rate causes lower purchasing power of people. A

lot of kinds of business are affected. Many people lose confidence in economics

of Hong Kong. They do not believe unemployment will be improved. Some say that

the Government should provide immediate assistance for the jobless. Some also

say unemployment is due to the attraction of cheap labor across the border. The

Government can no longer play the role of a bystander.

All of these above show the influence of the unemployment. In spite of how many

people who have talked about the topic of unemployment, everyone will be

concerned about this topic. The following sections will analyze this hot topic.

Reasons for unemployment in Hong Kong

1. Faster growth in total labor supply relative to that of total employment

In 1993 and 1994, the increase in Hong Kong labor force is 2.9% and 3.5%

respectively. At the end of 1993, the total labour supply is 2 970 000. Change

in the total labour supply is determined by the population growth, total

employment and the emigration condition. If the population growth and the total

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