15,600 more people lose jobs as HK unemployment nears 16-year high

By The SUN

The unemployment rate is likely to rise with Cathay's move to cut 5,000 jobs

 

Some 15,600 people in Hong Kong lost their jobs in the third quarter of this year, as the unemployment rate rose to a nearly 16-year high of 6.4% due to the continuing impact of the pandemic on the local economy.

Data released by the government on Oct 20 showed the unemployment rate growing by 0.3 percentage point from July to September, compared with the previous quarter.

The jobless rate is expected to rise even more by the next quarter, after Cathay Pacific announced today, Oct 21, that it would cut the jobs of more than 5,000 staff in Hong Kong, including about 2,000 cabin crew, many of whom are Filipinos.

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According to officers of Cathay’s Flight Attendants Union, those who were sacked will get an extra month’s pay and will be compensated for the unpaid leave they were forced to take earlier. The company will also not charge their MPF for their severance pay.

The union said the redundancy package was “not overly generous,” and feared more jobs would be cut because of the continuing decline in the economy brought on by the pandemic.

Lawmakers immediately expressed over the mass layoff at Cathay, saying the government must take steps to minimize the impact of the job cuts.

Lawmakers fear the Cathay job cuts would make other big companies to follow suit

Civic Party legislator Jeremy Tan that as the government had already injected $30 billion to bail Cathay out earlier this year, it should ask the company to do its best to retain staff.

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Federation of Trade Unions lawmaker Alice Mak said, on the other hand, that it is time for the government to give unemployment subsidies to help those affected.

She also feared the mass layoff would further push up the city’s unemployment rate by another 0.2 percent.

Starry Lee, chairwoman of the pro-establishment party Democratic Alliance for the Betterment of Hong Kong, said the job cuts at Cathay could lead other big companies to make a similar move.

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"I am very much afraid that Cathay Pacific’s plan is just the beginning and other large-scale companies will follow suit,” said Lee.

Total employment decreased by about 15,600 from 3,640,400 in June-August to 3,624,800 in July-September.

The impact of the job losses reverberated in the ranks of foreign domestic helpers, thousands of whom were laid off by employers who also lost their employment.

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In June-August alone, nearly 9,000 Filipino domestic helpers lost their jobs, with many employers citing job loss as the reason for terminating contracts. From January this year, the drop has been more than 15,000.

Secretary for Labour and Welfare, Dr Law Chi-kwong said the labor market deteriorated as a whole during the past quarter amid the third wave of the local epidemic, particularly in July and August.

However, he said, there were signs the pressure faced by the labor market stabilized towards the end of the quarter with support from the Employment Support Scheme, which helped beleaguered companies pay the salary of their workers.

The unemployment rate increased across almost all the major economic sectors, with more distinct increases in the retail, accommodation and food services sector; and arts, entertainment and recreation sector.

Underemployment decreases were mainly seen in the transportation and education sectors, while increases were mainly seen in the food and beverage service activities, and arts, entertainment and recreation sectors.

“As the overall economic situation remains weak and the global pandemic is still evolving, the labor market will remain under pressure in the near term…The government will continue to monitor the situation closely,” Law said.

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