*************************************
Following is the transcript of remarks (English portion) by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, on the latest unemployment statistics at a media stand-up session today (July 19):
Secretary for Labour and Welfare: The seasonally adjusted unemployment rate stood at 3.5 per cent in April to June 2011, same as that in March to May this year. The underemployment rate edged down slightly by 0.1 percentage points to 1.8 per cent.
Total employment further increased notably by about 10,100 to a new record high of 3.61 million. Over the same period, the labour force increased by around 12,100 to a level of 3.74 million. The new jobs created helped to absorb most of the additional workforce. Consequently, the number of unemployed persons rose only slightly by 1,900 during the period.
Analysed by economic sector, decreases in the unemployment rate were mainly seen in construction and insurance, while increases were seen in wholesale and accommodation and food services.
As to the underemployment rate, the decline was mainly concentrated in the construction sector.
In the next few months, the labour supply will continue to be affected by the entry of a new batch of fresh graduates and school leavers and also job seekers induced by the implementation of the statutory minimum wage (SMW). The extent to which these newcomers will be absorbed into the labour market will hinge on the number of new jobs created against the background of our pretty vibrant economy.
However, some elements of uncertainty remain on the horizon, in particular the Euro zone debt crisis and weak economic growth in the United States. We will remain vigilant and closely monitor development.
It has been two and a half months now since the statutory minimum wage has been in force in Hong Kong. So far, implementation has been generally stable and smooth. The state of law compliance was satisfactory. Out of over 7,500 workplace inspections carried out since May 1, there were only 45 suspected non-compliance cases. Of these, only three cases were detected in July so far.
At the same time, overall hiring sentiment has also remained positive. Last month, the number of private sector vacancies posted by the Labour Department increased by 11.6 per cent from nearly 66,000 in May to about 73,600, up by 20 per cent over the same period last year. For the first half of this month, the Department has already received over 40,000 new vacancies. So it is very encouraging indeed.
The Labour Department will keep up its efforts in providing comprehensive and free employment service to job seekers. Large-scale job fairs targeted specifically at the sectors likely to be affected by the statutory minimum wage will be held in Tung Chung Community Centre this Thursday and Friday, offering some 3,600 vacancies.
It is worth noting that the number of unemployment cases and low-earning cases under the Comprehensive Social Security Assistance (CSSA) Scheme has continued to decline. For June, unemployment cases registered a month-to-month decrease of 0.5 per cent, while low-earning cases fell by 1.2 per cent. Indeed, unemployment CSSA cases have been decreasing continuously for the last 22 months with a cumulative drop of some 5,300 cases. As for low-earning cases, the number has also fallen for 28 months in a row, with the cumulative reduction amounting to over 2,700 cases.
We hope that more grass-roots workers will benefit from the implementation of the statutory minimum wage and the vibrant job market.
Although the overall situation remains stable, we will continue to monitor development closely in order to assess the longer-term impact of SMW.
Reporter: The new jobs created are mainly in which sectors?
Secretary for Labour and Welfare: In fact, the vacancies cover a wide spectrum from, for example, retail, catering, trade to financial services, insurance, construction - there is a very heavy demand for workers particularly in construction, and also in the general service sector. So, a pretty wide range and spread of new jobs is created. In fact, it has been going on for quite some time. For the last period, we talk about over 10,000 new jobs created. In the previous quarter, we talk about 15,000 jobs created. So, we are talking about new jobs being created continuously, which in fact helped cushion the impact of the rise in labour force.
Reporter: You mentioned that the fresh graduates and economic situation may affect the unemployment rate. What will be the worst scenario?
Secretary for Labour and Welfare: This time every year we witness a number of fresh graduates and school leavers flocking into the labour market. It happens every year. We consider this normal, particularly in the lead-up to summer. It's a peak period. If you look at the figures generally, the number of jobs created helped cushion the impact of this rising labour force. That's why the unemployment rate held steady at 3.5 per cent.
Reporter: (About the impact of the statutory minimum wage on the unemployment rate.)
Secretary for Labour and Welfare: The initial impact of the statutory minimum wage, I must say, has been not significant at all. I would even say relatively negligible on the labour market, thanks largely to the very buoyant economy and the pace of job creation that cushioned the impact of the minimum wage. But we must not be complacent. We have to watch the development closely. As I said, there are elements of uncertainty in the external environment, the Euro zone debt crisis for example, and economic growth in the United States remains pretty fragile. We must watch development closely and we also have to monitor the longer-term impact of the minimum wage because it takes a longer time to have the impact surface in the end. We have to be vigilant while at the same time be realistic. On the whole, the general picture of the minimum wage up to now is fairly stable and fairly smooth in terms of implementation.
Reporter: What kind of longer-term impact can be expected?
Secretary for Labour and Welfare: Well, economists have warned of job losses in the end. But of course job loss is not apparent at the moment. You can even see that in some of the sectors, we are still talking about the looking for additional workforce. In fact, hiring sentiment remains pretty strong at the moment in Hong Kong. As I said, every working day, the Labour Department managed to post 3,000 job vacancies on its website. In fact, on certain days last week over 4,000 job vacancies per day were received. This is very indicative of the situation. Also, the number of people applying for unemployment social security and low-income supplement are also declining. The number of unemployment social security cases has been declining for 22 months. Low-income supplement cases are also falling for 28 months consecutively. So, all these speak volumes about the present economic situation, which is generally stable.
(Please also refer to the Chinese portion of the transcript.)
Ends/Tuesday, July 19, 2011
Issued at HKT 20:12
NNNN