Hong Kong should try to lure the children of emigrants from the city as part of a wider drive to attract outside talent amid the city’s aging workforce.
Around 800,000 people have left the city since the 1980s, according to government data. The total number of emigrants from Hong Kong is estimated to be more than a million, representing 15 percent of the city’s current population.
If the children of these emigrants are included, the total figure could hit 1.5 million, equivalent to 20 percent of the city’s population, much higher than in Singapore and Taiwan, which has emigrants of 150,000 and 480,000 respectively. Emigrants represent about 4 percent and 2.1 percent of the population in Singapore and Taiwan.
Large numbers of emigrants left the city either after the 1967 riots or around the 1997 handover.
The Hong Kong government should encourage the return of these emigrants to address the problem posed by the aging workforce. It has to find out which sectors or industries need outside talents. And it has to narrow the gap in living standards between Hong Kong and the cities where they are now.
Also, the government should ease rules for emigrants to return and settle down in the city.
In 1981, more than half of the city’s working population (aged 20-64) were below 35. The ratio has plunged to 30 percent in 2011. Meanwhile, the ratio of employees who are above 50 has soared from 22.5 percent to 33.4 percent during the period.
The upward mobility and innovative spirit of a city largely depend on the age structure of its workforce. If managerial positions were mostly held by senior citizens, younger employees would be deprived of the opportunity to gain managerial experience.
Meanwhile, young people can be promoted to senior positions in organizations with younger employees. And a young population would improve the innovative spirit of a city.
By contrast, an aging workforce usually leads to an increasing proportion of retired people versus the working population. That could drag down per capita GDP and overall living standards since most people depend on savings.
By 2015, 22 percent of the city’s working population will be over 65. Japan has reached this level in 1995, and its economy has run out of steam since then. Currently, 47 percent of Japan’s working population are above 65. Hong Kong will also be in that situation by 2030.
The city’s working population will stop growing from 2015, an unprecedented scenario since the 1950s. And the trend is expected to last until the end of this century.
The government has suggested delaying the retirement age for civil servants and encouraging more women to join the workforce. However, both measures are unlikely to reverse the contracting workforce.
This article appeared in the Hong Kong Economic Journal on Feb. 4.
Translation by Julie Zhu
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