I was a speaker at a forum hosted by the Hong Kong Federation of Trade Unions last weekend. The topic was on how to stabilize the Hong Kong economy and secure jobs for Hong Kong people. Chief Secretary for Administration Matthew Cheung Kin-chung was a speaker along with others.
Before the forum began, I had a brief conversation with Cheung. I told him my suggestion for job creation by the SAR government. I call this category of jobs “basic jobs” and have written about the idea before. I am truly worried about an explosion of job losses in the months to come, as many businesses may cut their staff and even close down.
In general, businesses do not want to lay off staff immediately in response to a business downturn. Experienced staffers are a valuable asset, while new recruits will take time to train or get familiar with the work environment and the corporate culture of a firm. The recent rise in the unemployment rate looks mild, but it is very ominous. In particular, the official unemployment rate is based on a rolling moving average of three months that drops data on the earliest month and adds data on the latest month. Thus the monthly announced unemployment numbers will, in general, not jump. Even if the latest month shows a rather sharp increase in the unemployment data, the figures of the prior two months will moderate the rise.
In any case, economists generally take the unemployment rate as a “lagging indicator” because employers tend not to respond to a downturn or an upturn in business immediately. There is typically a noticeable delay. There are widespread concerns that since employers are also trying to be nice and want to avoid breaking the bad news before the New Year, things may look truly ugly in the coming two to three months.
The idea of “basic jobs” is that these jobs will be available for job seekers as a last resort. These are real jobs and allow any taker to apply and to perform. As these are real jobs, those who take up such jobs will make a real contribution to society
The idea of “basic jobs” is that these jobs will be available for job seekers as a last resort. These are real jobs and allow any takers to apply and to perform. As these are real jobs, those who take up such jobs will make a real contribution to society. I think “basic jobs” are for this reason far better than handouts that are given to those who have lost their jobs. A “basic jobs” program is also better than loans, because loans need to be repaid and borrowers will face increasing psychological pressures as their loans accumulate. As a seasoned senior civil servant, Cheung expressed concern that once made available, the scheme may face difficulties in being phased out.
My quick response is: Why should the scheme be phased out? There are many reasons by which “basic jobs” should be instituted and should stay. After all, “basic jobs” are not a form of welfare. Although there is a stipend, the stipend is paid for valuable work.
First, let us consider what kind of jobs we are talking about. What comes readily to my mind is: helping to fight against the health menace caused by rats and mosquitoes; helping to clean up our beaches and country parks; cleaning up the graffiti and “Lennon walls” caused by demonstrators; spotting dangerous billboards that should be taken down and reporting them to the Buildings Department; finding traffic signs and directions that are unclear or placed in inappropriate locations; visiting homes of the aged and entertaining the residents or just providing them with company.
Such a type of work is certainly highly valuable. If we can reduce the spread of dangerous diseases by reducing the population of rats and mosquitoes, we will increase the productivity of our labor force and reduce the burden on healthcare services. If fewer people get sick from the diseases spread by rats and mosquitoes, hospitals will be less crowded and the medical staff can provide better services to patients. Those who take up “basic jobs” may also help reduce traffic accidents, improve pedestrian safety, reduce traffic congestion, attract more tourists, and cheer up senior citizens at homes for the elderly.
Apart from the value of the work, the fact that people are gainfully employed and are paid for their labor makes them feel good. We know some deserving people have refused to register for the benefits of Comprehensive Social Security Assistance (CSSA) because they want to be self-reliant.
Thus, the government’s spending on “basic jobs” is well worth it.
Second, I have argued that the proposed “basic jobs” should be part of our “policy infrastructure” that should stay even after this current economic downturn. Yes, why not? In general, if people can get alternative jobs that are better paid or offer better job satisfaction, they would go for those opportunities. If they cannot, for some reason, they will either have to rely on CSSA, or other stopgap assistance, or applying for “basic jobs”. If the government is obligated to help the unemployed anyway and will have to spend a fortune, why not undertake spending on the valuable work of “basic jobs”?
Over the last few years, people have debated the idea of basic income. I believe a quid pro quo arrangement is a much better solution to unemployment. It is more sustainable and also helps preserve the self-esteem of the beneficiaries.
The author is a senior research fellow at Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute at Lingnan University.
The views do not necessarily reflect those of China Daily.