The Unemployment Rate EssayIntroductionThe unemployment rate became a hot topic in the past few months when it rose to3. 5 per cent, a recent high for almost 10 years. The jobless rate was higherthan the 3.
2 per cent unemployment rate recorded in the May to July period. Theunderemployment rate in the June to August period rose to 2. 5 per cent from 2. 3per cent in the May to July period. Until recently, most workers who lost theirjobs were from the manufacturing sector.
They were middle-aged factory workerswith few skills and little education. But in recent months a large number ofemployees 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.
Forexample, the number of people who commit suicide is increased. It is becausemore people had lost their jobs for a long time. It is a serious threat to thelives of the poor. The unemployed people may also feel that it is unmeaningfulto 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. Therewas an unemployed man who stole rice because he was too hungry and he did nothave 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. Alot of kinds of business are affected. Many people lose confidence in economicsof Hong Kong.
They do not believe unemployment will be improved. Some say thatthe Government should provide immediate assistance for the jobless. Some alsosay unemployment is due to the attraction of cheap labor across the border. TheGovernment can no longer play the role of a bystander.
All of these above show the influence of the unemployment. In spite of how manypeople who have talked about the topic of unemployment, everyone will beconcerned about this topic. The following sections will analyze this hot topic. Reasons for unemployment in Hong Kong1.
Faster growth in total labor supply relative to that of total employmentIn 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. Changein the total labour supply is determined by the population growth, totalemployment and the emigration condition. If the population growth and the totalemployment is stable, the extra labour supply will increase the total laboursupply.
This extra labour supply are mostly from the influx of illegalimmigrants from China, imported labour ( 30,000 ), hiring of expatriates ( netincrease is 40,000 from 1992 to 1994 ) and the returnees from overseas. Thus,the supply of labour is greater than the demand and gives pressure on employment. From March to May of 1995, the total labour supply had risen 4. 4% but the totalemployment had just increased 3. 6%, so this aggravated the unemployment rate.
However, this is just a superficial reason. The following reasons can explainthe reason of unemployment in a deeper way. 2. Change in the economic structureThe economic structure in Hong Kong has changed from labour intensive to hightechnology and large capital intensive.
Also, it changes from manufacturingoriented to service oriented industries. Therefore, the manufacturing factoriesmove to China for cheap labour. From 1988 to 1994, there are 60,000 jobs losteach year. Of the total employment of different sectors, the portion of themanufacturing industries drops from 27.
4% in 1990 to 17% in 1994. Many labourare released from the manufacturing industries. Though there are a great demandof labour in the service sector, many of the unemployed still cannot find theirjob because of job matching problem. They do not have the skills demanded in thejob market, so there are both a lot of vacancies of jobs and a lot of unemployedlabour. This kind of unemployment is called the structural unemployment which isa kind of involuntary unemployment. 3.
China PolicyRecently, the Chinese government tries to control the economy by macro policysuch as implementing the contractionary monetary policy , inflation controlpolicy. This leads to the slow down in the Chinese economy. The flow in of theChinese capital to Hong Kong for speculation and investment reduce. This affectsHong Kong’s economic growth simultaneously.In .
