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 unemploymentInvoluntary 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

Unemployment rate

0

2

4

6

8

10

Perc

anta

ge

Seasonally adjusted unemployment rate Underemployment 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

Unemployment rate by gender

0.0

2.0

4.0

6.0

8.0

10.0

2000 2001 2002 2003 2004 2005

year

unem

ploy

men

t rat

e (%

)

Male

Female

By Gender

Unemployment Rate by Age

0.0

10.0

20.0

30.0

40.0

2000 2001 2002 2003 2004 2005

Year

unem

ploy

men

t rat

e (%

)

15-19

20-29

30-39

40-49

50-59

60 or above

By age

Compare the Unemployment rate with other countries

Rank CountryUnemployment rate

(%) Date of

Information

1 Andorra 0.00 1996 est.

2 Norfolk Island 0.00 NA

38 China 4.20 2004

40 Taiwan 4.20 2005 est.

42 Japan 4.30 2005 est.

44 United Kingdom 4.70 2005 est.

45 Macau 4.80 2004

49 United States 5.10 2005

55 Hong Kong 5.80 October 2005

92 European Union 9.40 2005 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 p

rogrammes 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 15-19 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 yo

uth The target is to reduce the unemployment of t

he them However, these two schemes are failed to achi

eve the goal The major reason is that the economy is at rec

ession Even improve the skills of the teenagers it still can’t solve the problem of unemploym

ent

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 pu

blic 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 redu

ced 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