Econ 100 Group 6 How to tackle the unemployment problems in Hong Kong?

Introduction What is unemployment? Unemployment rate pool of unemployed people = Labors force Voluntary unemployment Involuntary unemployment 3 major unemployment : Structural, Frictional, Cyclical

Unemployment situation in HK

Unemployment Recovery after economic storm Unemployment rate decreased 2005 : the unemployment rate went down to 5.6% Underemployment 2004 : 3.3%  2005 : 2.8% most affected by underemployment  less educated and lower-skilled workers Unemployment rate

By education higher educational levels  lower unemployment rate tertiary education : 3.2% lower secondary education or below : 8.5%

By skills higher-skilled workers  lower unemployment higher-skilled workers : 2.4% less-skilled workers : 6.4%

By occupations

By Gender

By age

Compare the Unemployment rate with other countries RankCountry Unemployment rate (%) Date of Information 1Andorra est. 2Norfolk Island0.00NA 38China Taiwan est. 42Japan est. 44United Kingdom est. 45Macau United States Hong Kong5.80October European Union est.

Structural Unemployment

Cause of Structural Unemployment Changing in relative demands and supplies in different sectors and industries Mismatching between the unemployed skill labour and the jobs.

Cures for structural unemployment

Stabilizing the relative demand and supply of different industries and sectors Reduce and lower the speed of structural changes of the economy Concentrate to develop a structure of economy Government should help enhance the stability of structure in a country

Providing retraining programme Due to the changing economy structure Mismatch of labour skill exists Unemployment rate will increase Government provides some retraining programmes Help labour to find a new job Reduces the unemployment rate

Interactive Selective Placement Service As disabled people are difficult to find a job The number of unemployed people will rise Government provides free recruitment service to employers and free employment service to job seekers who are disabled Help them to find a job more easily The unemployment rate will thus fall

It is helpful to the disabled people But, the amount of them is too small Even though the unemployment will be improved The change of percentage is not obvious It is not an effective method to reduce the unemployment rate Interactive Selective Placement Service

The Youth Pre-employment Training Programme The unemployment rate of teenager is high The programme provide school leavers aged between with a comprehensive range of employment – related training, workplace attachment, etc. Enhancing the employability of them Decrease the unemployment rate

The Youth Work Experience and Training Scheme It provides on-the-job training of 6 to 12 months for young people aged between 15 and 24 with education attainment below the degree level Trainees can also enjoy employment support and off-the-job training allowance Improve the employment of the youngsters The unemployment will fall

Results These two programmes are decided for the youth The target is to reduce the unemployment of the them However, these two schemes are failed to achieve the goal The major reason is that the economy is at recession Even improve the skills of the teenagers it still can ’ t solve the problem of unemployment

Upgrading the general education level In the recent years, the economy structure of Hong Kong is changing The skills of most labour can ’ t match the need of new industries and firms The unemployment rate will increase But, upgrading the general education level of public can help them to have better knowledge Their occupation mobility will be improved As a results, the unemployment will be reduced

Upgrading the general education level During the economy structure changes, the unemployment rate will be pushed up The higher the education level of the public, labour can have higher occupation mobility worker can be easier to find a job in other sector Unemployment rate will decrease

Frictional unemployment

Cause of Frictional Unemployment Dynamics of the labour market flow or the normal turnover of the labour market Some pool of temporarily, transitionally unemployed workers is unavoidable

Cures for Frictional Unemployment

Labour Department Labour department providing the information of labour market such as the latest vacant of different companies Increasing the information flow The time of matching people with the job will be decreased The time of searching a new job has been reduced and lower the frictional unemployment rate

Conclusion 1) Workers with higher education level have lower unemployment rate Upgrade general education level 2) Unemployment rate still high among the skilled workers Provide re-training programe 3) Frictional unemployment provide more information for labor