Time to untie the knot on importation of foreign labor

May 23, 2019 18:00
According to recent government projections, Hong Kong is likely to be nearly 170,000 workers short by 2027. Photo: HKEJ

Importing foreign labor has remained a long-standing yet highly contentious topic in Hong Kong over the years, with no consensus ever reached among the major stakeholders over the issue.

The subject was brought up once again by Liberal Party lawmaker Peter Shiu Ka-fai, who represents the wholesale and retail sectors, at a meeting of the Legislative Council Public Accounts Committee last Saturday.

At the meeting Shiu issued a “warning” that Hong Kong will “go bust” if it doesn’t import foreign labor.

In his reply to Shiu at that same meeting, Secretary for Labour and Welfare Law Chi-kwong said the government would seriously consider the option.

Then on Sunday, Chief Secretary Matthew Cheung Kin-chung also responded on his official blog, admitting that chronic manpower shortage could hinder Hong Kong's economic development.

The administration, Cheung said, will focus on certain industries that are bearing the brunt of acute labor shortage and seriously study the feasibility of importing foreign labor.

In our opinion, the key to winning majority support in society for importing foreign labor lies in the government striking a reasonable balance between the interests of local workers and the business sector, as well as the average citizens in their capacity as either consumers or service receivers.

Another determining factor for importing labor is whether the government can provide sufficient and decent policy support for the initiative, so that local workers would be guaranteed both job opportunities and reasonable wage levels, while ensuring that the overall business operation costs won’t shoot up and result in elevated prices of goods and services.

All these are pretty much a balancing act, and will pose a rigorous challenge to the wisdom and competence of the government decision-makers.

As we all know, labor shortage in Hong Kong is an undeniable fact.

According to the recent government projections, the city is likely to be nearly 170,000 workers short by 2027, particularly workers with only junior-secondary education level or below.

Industries that are hardest hit by labor shortage are the construction, elderly care, transportation, retail and healthcare sectors.

The blame partly lies with the city’s skyrocketing rents, which have eaten up a large chunk of the operating costs of employers that could otherwise be used for higher wages to attract new blood, and partly due to the punishing working conditions and requirements of these jobs.

From the employers' point of view, since they have so much difficulty hiring enough employees, the quickest fix is to import foreign workers.

Nevertheless, any call for importing overseas labor will inevitably provoke a fierce backlash among the local labor sector, whose biggest concern is that this could open the floodgates to foreign workers, thereby resulting in either jobs being taken away from locals, or overall salary levels being driven down.

To untie the knot and resolve the fundamental differences between the business and labor sectors, the government must provide adequate proof that the local labor market can no longer meet the manpower needs of certain industries, hence the necessity to import foreign labor.

At the same time, the administration must also reassure local workers that importing foreign labor won’t threaten their livelihood.

That being said, the government should first devise ways to fully utilize the existing local human resources and remedy the job market mismatch.

In particular, authorities should substantially step up efforts at tapping into the potentially huge labor pool of the “young elderly” and women.

At present, there is an initiative known as the “Employment Programme for the Elderly and Middle-aged” (EPEM) in force. But its efficacy is limited, and there is still a lot of room for improvement and fine-tuning of the program.

As far as releasing the labor potential of local women is concerned, there are indeed a lot of things the government can do.

For instance, the authorities can divert more resources into providing child care service in the community, so as to enable more women to re-enter the workforce.

Yet unfortunately, it appears the relevant government departments have been taking this aspect a lot less seriously than they should.

As to protecting the job opportunities and employment rights and interests of local workers, the key thing the administration needs to do is to devise stringent regulations and measures to prevent “heartless” employers from exploiting their local employees through importing foreign labor.

Since it is of the utmost importance to give priority to local jobseekers over foreign counterparts, as well as maintain reasonable wages, we agree that the idea of establishing minimum wage levels for specific industries is worth studying.

This article appeared in the Hong Kong Economic Journal on May 21

Translation by Alan Lee

[Chinese version 中文版]

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Hong Kong Economic Journal