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Monday, September 28, 2020, 01:45
Virus-related unemployment benefits should be increased
By Yang Sheng
Monday, September 28, 2020, 01:45 By Yang Sheng

Latest figures released by the Census and Statistics Department last week show the unemployment rate for June through August, after seasonal adjustment, hovered at 6.1 percent, unchanged from the previous period of May through July. However, underemployment in the same three-month period rose to 3.8 percent from 3.5 percent and was the highest since the SARS epidemic of 2003. This proves the employment situation in Hong Kong remains worrying, if not critical, as some 5,800 more people filed for unemployment benefits than did so in the previous statistical period.

Many small and medium-sized enterprises have been temporarily shut down since a series of social-distancing measures were taken to contain the spread of the COVID-19 pandemic. Most of those newly unemployed are bread earners of low-income households, making it absolutely necessary for the special administrative region government to increase unemployment benefits as an extraordinary response to the unexpected emergency situation. It is the least the government can and should do to help the most needy tide over this very difficult time.

The government should shift the focus of unemployment relief from employers to those who lost their jobs because of the anti-epidemic lockdown

The Hong Kong economy has been impacted by the pandemic for eight months, pushing the unemployment rate to an alarmingly high level compared with the record lows before the scourge hit. Thanks to two rounds of financial assistance drawn from the Anti-epidemic Fund, especially the Employment Support Scheme, designed to help employers keep as many employees as possible, Hong Kong has been spared an employment drought on top of the public-health crisis. That is why the unemployment rate did not rise above 6.1 percent in June through August. It is fair to say the Anti-epidemic Fund has effectively prevented a tidal wave of unemployment caused by sudden business closures, but the government could have done more in caring for those who have lost their jobs to the pandemic. According to Hong Kong law, those fired by their employers for personal reasons are not eligible for unemployment benefits. The reality is the latest number of unemployed workers has topped 248,300, of which over 58,000 were filed in June through August, meaning that many people have no regular income or emergency relief amid heavy restrictions caused by COVID-19. It opens a big hole in social welfare that the SAR government must plug as soon as possible.

Moreover, the SAR government must be prepared for more challenges from the possible worsening of Hong Kong’s unemployment situation if the spread of COVID-19 cannot be contained at a safe level for life in general to be closer to normal and for temporarily closed businesses to reopen. In that case, government subsidies to employers offsetting half of workers’ salary will not be enough to prevent the rise of unemployment because continued industry lockdowns may force many employers to lay off more workers to stay afloat despite emergency relief from the Anti-epidemic Fund. For example, some 158,000 employers applied for the second round of pandemic relief, about 10,000 fewer than in the first round, and 7,500 employers, including Cathay Pacific Airways, that applied for first-round relief did not apply for the second round. Many observers believe those employers are preparing for mass layoffs to avoid closure. As such, the SAR government should figure out an effective way to forestall a possible unemployment avalanche by lifting indoor-service restrictions sooner rather than later. At the same time, the government should shift the focus of unemployment relief from employers to those who lost their jobs because of the anti-epidemic lockdown. They need employment to feed their families, but the chance of finding a job these days is extremely slim, to put it lightly. No matter how many there are, the government is obligated to help every one of them.

The bread earners of the family losing their jobs to a public-health crisis is about the worst thing that could happen economically. A recent survey by the Hong Kong Federation of Trade Unions found 74 percent of 1,490 respondents were in danger of losing their jobs, being put on unpaid leave or losing half of their monthly salary due to the pandemic. And about one-third of them said they have no income of any kind now. For those families, that life without regular income is very hard should not only be a foregone conclusion but an understatement as well. If the SAR government fails to help lift those residents out of such a precarious situation soon, it may find an even bigger problem in deteriorating social stability. The first two rounds of financial relief from the Anti-epidemic Fund all went to helping employers retain as many employees as possible, while the third round has earmarked just HK$4.5 billion ($581 million) for 23 industries/sectors hit worse than others. And no financial aid has been given so far to families that have lost their income to business closures due to COVID-19. 

Perhaps it is time the government gave more attention to helping those who are already jobless, in addition to, if not instead of, helping employers keep existing employees on the job with no guarantee to rehire the laid-off. Direct unemployment benefits can be directly drawn from the Anti-epidemic Fund, or as additional spending of the Comprehensive Social Security Assistance Scheme, or in the form of a special allowance for emergency relief or welfare “dole” or any form of charity handout.

The author is a current affairs commentator. 

The views do not necessarily reflect those of China Daily.

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