Labour and employment

The year 1992 opened with some conflicting and disturbing news in the labour market. On the one hand, the seasonally adjusted unemployment rate hovered around the four-year high of 2.4 to 2.5 per cent. On the other hand the labour force had reversed its growth and actually shrank in the first quarter of the year. The labour force participation rate dropped 1.1 percentage points from the year-ago level, resulting in a complete negation of the small growth in the labour force that had been registered in the preceding three quarters. A question begs to be answered: is there indeed a labour shortage in Hong Kong? The official view was yes, and the government’s response to that shortage was the third labour importation scheme (first proposed in 1989). This time, the number of foreign workers admitted under the scheme was to approximately double to 25,000 (excluding those directly associated with the Port and Airport infrastructure project). Labour’s view, as expected, was that there was no shortage of labour, and that the scheme only served to boost capitalists’ profits. To fight back, a “Strike Fund” was set up to support any industrial action that might become necessary.