Hong Kong’s seasonally adjusted unemployment rate in the three
months to July was 2.8 percent, the lowest in more than three
and a half years, according to the Census and Statistics Department.
This suggests that after years of full employment, Hong Kong faces a labor shortage. As early as the final stage of the COVID-19 pandemic, Hong Kong in fact had been experiencing varying degrees of labor shortages in a wide range of sectors and occupations.
According to the sector-specific labor importation programs unveiled earlier, the government will allow the importation of a total of no fewer than 20,000 nonlocal workers for a number of sectors with genuine diffculties in recuriting suitable labor locally.
Among those sectors, construction will be the biggest beneficiary, with a 12,000-strong dependence on social quota. This is because the sector has long been subject to severe labor shortages, which could not only hinder the government’s efforts to increase housing supply but also affect the construction quality, occupational safety and the speed of project completion.
While it is imperative for Hong Kong to import foreign labor, as I have emphasized on many occasions, it is more important to enhance training for local workers, retain local professionals and release potential workers who have been held back from the labor market for various reasons.
Ahead of last year’s budget and Policy Address, I suggested that the government implement appropriate policies and tax incentives to encourage more housewives, ethnic minorities and retired senior residents to reenter the labor market. The retirees have the largest potential to boost the labor force.
Hong Kong residents in their 60s and 70s are often in good physical shape. Allowing those who have reached retirement age to continue working could benefit the economy and businesses, as well as reduce senior residents’ dependence on social support, and would be a nice way for them to pass the time. They also could widen their social circle, feel more accomplished and have a better quality of life. Their physical and mental health would benefit from a more fulfilled life, thereby reducing their expenditures on private and public health care.
On the Chinese mainland, reemployment is known as fanpin, which usually refers to the temporary emplovment of retired workers. Reemployed staff often have a wealth of knowledge and experience but may not be as physically fit as their younger counterparts. They would be better suited to some part-time, consultancy and internal training roles.
It is noted that there is no mandatory retirement age by law in Hong Kong. Only the Hong Kong Special Administrative Region government, some public organizations and large companies have set a nonstatutory retirement age. Early on, the government considered raising the retirement age for all civil servants, but some people objected to the plan, expressing concern about the potential impact on pension payments as well as on opportunities for younger workers to advance to higher positions. The same issues exist in the private sector.
If a standardized reemployment system could be introduced in Hong Kong, pioneered by the government and large companies, and actively promoted to small and medium-sized enterprises and the general public, coupled with appropriate support facilities and incentives, such as tax incentives and appropriate retirement benefit programs, it would no doubt help attract more retirees to continue to work, resulting in an increase in the workforce, and help Hong Kong to ease the labor shortage.