Hi Jay, This is also Hong Kong, right now, after the bubble, because it is the most flexible and rapidly adjusting economy, where there are few social nets, and where the minimum wage is only applied to domestic helpers.
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Hong Kong job shortage spreads despair
Thomas Lau Bloomberg News
Thursday, August 22, 2002
HONG KONG Chan Ling quit her job as an accountant in June, even as the jobless rate in Hong Kong surged to a record.
"I had to quit because they pushed me so hard," said Chan, who had earned a monthly salary of 5,500 Hong Kong dollars ($705) working at a nursing home. She was hired as an accounting clerk, yet her 11-hour days also included feeding residents and taking them to the hospital. Lunch breaks were out of the question.
Meanwhile, falling wages, longer working hours and a dearth of jobs are sapping consumer spending, prolonging an economic slump that slowed growth to 0.6 percent last year from more than 10 percent in 2000. The economy is forecast to expand 1 percent this year.
"Workers' sentiment is close to the point of despair," said Lee Kai-ming, chairman of the Hong Kong and Kowloon Trade Union Council, which has over 40,000 members. "People aren't spending, and that makes it harder for Hong Kong to find a way out of its economic slump." Retail sales have fallen in 11 of the past 12 months, and retail prices have slid for 44 months.
As stalled growth and high costs prompt companies to cut jobs, employers are finding it easier to cut wages, extend hours without pay and pile on extra work - especially in a place with few worker-protection laws and where jobless benefits often do not cover the rent.
The unemployment rate, which has more than tripled in the past five years and climbed to a seventh record of 7.8 percent in July, may rise even further as growth stalls and high costs prompt companies to eliminate jobs.
Hong Kong's financial secretary, Antony Leung, said this week that high unemployment "will be endured for another two quarters."
The crumbling labor climate has made many desperate for a job. Toh Kim Ho, managing director of Immergreen, a Hong Kong design and construction company, said he received more than 100 applications within a week after advertising for project managers at a salary of less than 10,000 dollars a month. Many applicants had years of experience and master's degrees in business and were fluent in English and Mandarin.
Hong Kong's growing ranks of fired workers get little help from the government, which provides a maximum of 1,600 dollars a month in unemployment benefits - less than the cost of spending one night at most five-star hotels and about half the level paid in Australia. Those who have jobs are subject to "employer-biased" labor laws, said Temogen Hield, a lawyer at the American firm of Coudert Brothers LLP. Hong Kong employers, for example, do not have to give formal warnings before firing employees. Hong Kong's job market is also increasingly strained by competition from mainland China, which is drawing companies across the border with lower costs and potential consumer market.
Bank of East Asia Ltd. said in July that it would shift 626 back-office jobs to China over two years and open more mainland branches to ride out a slump in the Hong Kong market.
And the German company Siemens AG said in June that it would move its regional mobile phone headquarters from Hong Kong to Shanghai and dismiss some of its 800 workers in Hong Kong. As Hong Kong's job situation deteriorates, shrinking incomes and rising debt are driving more people to bankruptcy - another negative for an economy struggling to regain momentum. Individual bankruptcies almost tripled in the first seven months of 2002 from a year earlier, and credit card issuers wrote off more than 10 percent of what they were owed last quarter.
Chan, the unemployed accountant, was recently approved for bankruptcy with nearly 300,000 dollars in unpaid credit card bills.
"At one point," she said, "I had 15 cards."
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PDCU, Jay |
