Hong Kong’s economy has been changing fundamentally for many years. That the city’s dependence on manufacturing is tapering off is well documented: the sector employed 4.8 per cent of all workers aged 15 and over – or 167,400 people – in 2008, but 2.6 per cent – or 100,000 – in 2018, according to November’s “Quarterly Report on General Household Survey”. Less often discussed is the decline in the share of employment of the import/export trade and the wholesale industry (by 5.3 per cent) and the transport, storage, postal and courier services, information and communications industries (by 0.4 per cent) in the same period. These have been replaced by the likes of construction, hospitality and professional and business services.
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No one should be surprised. The rise of the “Greater Bay Area” scheme and the US-China trade war highlight Hong Kong’s shift to a service-oriented economy. That means many jobs at all economic levels are at stake, but instead of waiting around to see what damage may be done, the government should take the opportunity to create a better worker adjustment programme.
Many major economies have some sort of worker adjustment programme that can help those displaced by shifts in industry patterns to retrain. For example there is the Trade Adjustment Assistance (TAA) scheme in the US. Created in 1962, TAA’s benefits include relocation assistance, subsidised health care insurance and extended unemployment benefits – provided recipients are enrolled in job training programmes. Originally targeting factory workers, farmers and fishermen, the TAA was revised in 2009 and 2011 to cover workers in service sectors such as information technology, insurance, banking and legal services.
In a similar vein, the European Union offers the European Globalisation Adjustment Fund (EGF), which supports economically displaced workers in finding work, gives career advice, offers mentoring and coaching, helps with starting businesses and organises classes and retraining opportunities.
In Hong Kong, the government offers piecemeal support to workers along the lines of the TAA and the EGF. But the authorities should first consolidate all these services into a formal worker adjustment programme and place these services in a physical location.
The Work Incentive Transport Subsidy Scheme meanwhile reimburses low-income Hongkongers for their commuting costs. This could easily be expanded to cover all workers who become unemployed by shifts in industries.
At the same time, the government currently offers no relocation assistance to skilled Hongkongers with the ability to speak the right dialect who want to work in the Greater Bay Area or elsewhere in mainland China.
The government should also consider funding more courses to educate and retrain workers. Although bodies like the Employees Retraining Board and the Continuing Education Fund work with educational groups to teach and upgrade skills, the number of spots in vocational courses does not meet the demand from thousands of unemployed and low-income people.
Government websites and job boards, moreover, are inaccessible to the many poor people and elderly jobseekers who disproportionately have no access to smartphones or computers in their homes.
Career counselling for unemployed workers should also be accessible to the poor. This means staffing counselling centres with enough advisers and minimising the waiting times for consultations.
There are winners and losers in Hong Kong’s ongoing industrial shift. Job retraining and relocation along the lines of the TAA and EGF should be the natural responses to make sure local workers stay competitive, and the government must polish its worker adjustment programme so that it is tailored to meet the unique challenges of China-Hong Kong trade.
Gary Lai was the founder and director for 10 years of the anti-poverty campaign TKO Poverty