HK's Jobless Rate Unchanged Despite Covid Curbs

Hong Kong's jobless rate has remained steady despite a business shutdown caused by the third wave of local Covid-19 cases, but one expert warned that the problem could worsen later in the year as businesses begin to cut staff.

According to government figures released on Thursday, the unemployment rate in the three months ending August stood at 6.1 percent, unchanged from the May-to-July period.

The underemployment rate did go up, climbing to 3.8 percent from 3.5 percent.

Economist Andy Kwan, director of ACE Centre for Business and Economic Research, said the government's Employment Support Scheme has helped to save jobs during the latest wave of the outbreak.

But he also warned that things could take a turn for the worse moving forward.

"The job-retention programme, the policy, helps the labour market. You can see that some businesses applied for the first stage of the job-retention scheme," Kwan said.

"Now those businesses decide not to apply. What it means that... I think, the business is too bad, they cannot survive even with the help of the government, with the subsidy. More or less, they decide to close down the business.

"In this case, you'll witness more unemployed workers in the economy in the next few months."

Secretary for Labour and Welfare Law Chi-kwong issued a similar warning. "While the local epidemic situation has started to ease gradually in September, the global pandemic is still fluctuating in a rising trend and the overall economic situation remains weak. The labour market will remain under pressure in the near term."

The consumption- and tourism-related sectors were among the hardest hit in the period under review, with a combined jobless rate of 10.9 percent, hitting a fresh high since the SARS outbreak in 2003.

The jobless rates for food and beverage service activities, as well as the construction sector, were also in double-figures.

"The labour market remained austere in June-August 2020 as the third wave of local epidemic in July and August had continued to disrupt a wide range of economic activities, notwithstanding that the Employment Support Scheme had continued to provide support," Law said.

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