Analyze The Causes Of Poverty In Hong Kong And Give Suggestions On How To Combat This Issue. (Unemployment)
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Analyze The Causes Of Poverty In Hong Kong And Give Suggestions On How To Combat This Issue. (Unemployment)
Introduction
Hong Kong is one of the world’s largest and most economically significant areas, but it also has a significant poverty problem. Since November 2018, approximately one-fifth of Hong Kong’s population has been living in poverty, with a monthly income of $700 for those living below the poverty line. The average monthly cost of living in a 900-square-foot apartment with two common utilities is $3,885. In addition to this, a significant population in this country is suffering from unemployment that is raised by different factors in this country. Unemployment directs impacts and raises the poverty levels in this country. The primary explanation for this surge in Hong is attributed to labour unions and political parties (Hong Kong’s Jobless Rate at Highest Level since 2004, 2019). They advise the government to impose entry restrictions. At the hands of it is not the only reason for the Hong Kong government, businesses, and capitalists. Unemployment is primarily caused by structural changes in our economy. Therefore this aims to show how unemployment has increased the poverty in Hong Kong.
Recent Statistics on Unemployment in Hong Kong
According to the most recent workforce statistics from the Survey and Statistical Agency, Hong Kong’s unemployment rate increased from 3.7 per cent in December 2019 to 7.2 per cent in February 2020. The unemployment rate rose by 0.2 per cent from January 2021 to January 2022. The unemployment rate increased by 1.5 percentage points in the quarter ended February 2020, reaching 4.0 percentage points in the same quarter ended February 2021. Unemployment, however, increased from 3.8 per cent in November 2020 to 4.0 per cent in February 2021, and from 3.8 per cent in November 2020 to 4.0 per cent in December 2020 to February 2021. Between December 2020 and February 2021, and November 2020 to January 2021, the poverty rate increased, as did trade imports and exports; postal and postal activities; education; and the arts, entertainment, and recreational sector. Between November 2020 and January 2021, total employment decreased from 3.63 million to 3.61 million, and between December 2020 and February 2021, total employment decreased from 3.63 million to 3.61 million. Additionally, the labour force shrank from 3.88 million to 3.87 million over the same time (Trading Economics, 2020). Director of Labor and Welfare Law said that In December 2020, their labour market was under severe strain, and it would remain so until February 2021. Despite this, the situation stabilized in the final three months of three months, parallel to the Covid-19 scenario change. Additionally, the labour market faced short-term difficulties as the disease epidemic persists and inbound tourism remaining stagnant. Therefore his increased rate of unemployment with a significant number of people working in both the private and public sector being laid off has resulted in to increase in poverty levels in Hong Kong (Qin et al., 2020).
Major Causes of Unemployment in Hong Kong
Greater overall growth in labour supply about total employment; Hong Kong’s population increased by 2.9 per cent and 3.5 per cent, respectively, in 2015 and 2016 Sensibly, the total labour supply at the end of 2016 was 2 970 000. In general, change Population growth, total jobs, and emigration all influence labour supply. The increase in demand would increase the overall supply of labour. According to a recent survey, this additional labour supply comes mainly from Chinese illegal immigrants, imported labour of 30,000, and recruiters among expatriates. Between 2016 and 2015, there was a net increase of 40,000 people, including returnees from abroad. As a result, labour supply exceeds demand, placing downward pressure on jobs. Starting in March, The overall labour supply had increased by 4.4 per cent by May 1995, but the total population had remained unchanged. The unemployment rate rose by 3.6 percentage points. With the increase in unemployment, more poverty lines emerge
Changes to the economic system; the country’s socio-economic model has shifted from intensive to high labour, technologies and massive amounts of money. Furthermore, it shifts from output to service-oriented industries. Manufacturing plants are then relocated to China to take advantage of lower labour costs. Between 2015 and 2016, 60,000 jobs were lost every year. The proportion of manufacturing firms in various sectors fell from 27.4% in 2015 to 25.8% in 2018. In 2018, it was 17%. Many workers are laid off in the manufacturing sector (Peng et al., 2019). Since it exists Owing to a labour shortage, many members of the workforce are unable to find employment in the services sector. Because of the problem of job matching, their work is needed. They lack the requisite job skills. Furthermore, there are a lot of job opportunities and a lot of people looking for work. This increases the poverty numbers to increase significantly
China’s foreign policy; Previously, the Chinese government could control the economy through macro politics, Regulation for controlling inflation, including the management of the economy’s money supply. The Chinese economy suffers as a result. The influx of Chinese capitalists to Hong Kong reduces uncertainty and costs. This affects the economic growth of Hong Kong. Similarly, The stable trading partnership between China and Hong Kong, in the background, fuelled buying power in Hong Kong’s service sector (The Unemployment Problem In Hong Kong – Free Coursework from Essay.Uk.Com, 2016). Despite some changes in the portfolio, recently, the Chinese environment. First and foremost, there was a high rate of inflation. Inflation had been about 20% for the previous two years. According to the macro agenda, the most recent figures are 18.5 per cent. It is still very strong. In addition, the government begins to raise the property tax. China’s investment efficiency is decreasing in each of these variables. The government’s spending power has a direct impact on Hong Kong’s services market, and a significant number of workers have been laid off.
Exorbitant rents and a fast rate of inflation; the cost of output is eight consecutive years of high wages and inflation. Hong Kong businesses, particularly labour costs, are soaring. On the one side; this allows companies to move labour-intensive production facilities. Costs of labour are decreased. On the other hand, these companies are attempting to smear work or reduce worker engagement but increase resource and technology allocation Increase standardization and quality to reduce manufacturing costs (Guo et al., 2018). Thus, numerous businesses, including the Japanese, we’re unable to afford high rents and were forced to close. As a result, A lot of jobs were released and unemployment sparked
The non-interventionist stance of the government; The Hong Kong administration lacks long-term economic planning. Adopting a non-interventionist economic policy is very detrimental to this economy. The economy’s structure was changing in 2014. The industrial industries have shrunk. The government, on the other hand, has done little to assist. Furthermore, the government has long neglected the research and development of high-tech applications. As a result, Hong Kong’s industrial technology cannot keep up with the other competitors. This explains why Hong Kong’s productivity has recently fallen. Labour productivity in Hong Kong was 3.8 per cent in 2016, while it was 4.8 per cent in Taiwan and South Korea and 4.5 per cent in Singapore. We can see from this that Hong Kong’s competitiveness is eroding and that a high unemployment rate is inevitable. The government enacts high-level land policies that result in a massive increase in land prices, resulting in rent rises for companies and factories (Guo et al., 2018). The introduction of wastewater treatment charges increases production costs as well. This increases the cost of production for companies hence increasing unemployment rates.
Unemployment is widely thought to have a negative relationship with wages. Inflation rate and level According to some analysts, Hong Kong’s current economic condition is that it has a strong unemployment rate but a low inflation rate. The periodic shifts in the integrated economic system produce predictable results. The persistently high inflation rate has raised production costs since 1987. Before a certain degree of service is reached (Guo et al., 2018). As a result, consumers’ buying power has decreased. Money’s power and its negative consequences; meanwhile, people want to increase their expenditure because they are afraid of anarchy as a result of the change in sovereignty. Politicians, on the other hand, sought to mitigate the high inflation rate by raising interest rates.
A higher population is getting older. With 7.4 million inhabitants, Hong Kong has many elderly. The combination of evolving technology and economies has affected those who have been working in more blue-collar jobs in past years. This has a dramatic impact on how accommodation, food and basic needs can be paid as white-collar workers take over the region. The government has issued handouts that have benefited many people in poverty, but what needs to be done is retraining and reassigning them (Lee and chou, 2016). This reduces the productivity of these people due to their age, increasing the dependency ratio and as a result having a negative effect on unemployment.
Solutions to The Problem Of Unemployment In Honk Kong.
One of the major solutions in understanding the impact of full employment; To make the Hong Kong people understand the importance of full employment, they must first correct their mentality. Hong Kong’s unemployment rate is expected to remain stable at 3-4 per cent for the next few years. As a result, keeping the unemployment rate between 2-3% would aid in managing labour growth. Cost as well as the stability of the Hong Kong economy. The government should also consider creating enough jobs that will at least absorb half of the percentage of the potential population looking for jobs in this country. Policymakers should also consider lowering interest and rent policies that will make the environment in Hong Kong favourable for businesses and companies to invest and therefore making enough employees.
The city’s growing population can be blamed for some of Hong Kong’s high unemployment rate. Labour from other countries, as a result, reducing the amount of work imported is the safest option. The government should base the appropriate rate of economic growth on the rate of economic growth of each year to adjust the required rate of economic growth. Imported labour to meet labour market demand. The increased number of imported workers is a result of their ability to accept them. Wages are smaller than those paid to locals (Peng et al.2019). However, if the local labour force is capable of doing so, reduce your payments to a level that is both too low and too difficult, such as working long hours for a monthly salary of only $4,000 their salaries are not reimbursable (Peng et al., 2019). Make sure they have their basic needs met. As a consequence, staff should not always be silent; instead, they should speak up. Opinion and battle for their interests, such as labour force reinforcement, rather than relying exclusively on the government to enforce new war policies a scarcity of employment a scarcity of employment
The government should relax the eligibility requirements for unemployment insurance. Employees are compensated to assist them in addressing their problem. Staff, on the other hand, does not necessarily wait. In return for the support of the government. You should continue to look for work and prove your worth. Dissatisfaction with unequal treatment on the part of the government some businesses continue to operate illegally. The government can also pass new legislation, as the United States has done on guiding the employment of foreigners (Lee, 2019). Employers can be charged with a crime if they hire migrant workers. This is feasible. Assist them in stopping the employment of undocumented employees. In addition to this, the government should have measures that guide the immigration status of people from different countries. The country should increase the restrictions that are required on acquiring citizenship that will reduce the impact of the foreigners. Investment and development capabilities could also be viable options. Administration of the Government This can be accomplished by raising spending while lowering the benefits tax rate (Unemployment and Vacancy in the Hong Kong Labour Market, 2002). Desire to invest in local businesses. If spending is increased, there will be a rise in expenditure. There are more job openings, and both supply and demand are rising. Increased government spending would boost aggregate demand, causing interest rates to fall. The rate of unemployment. By cooperating with other Asian countries, Hong Kong will boost its competitiveness.
The government needs to keep labour costs under control. Jobs and labour productivity Economic policies must be established to ensure the economy’s long-term viability. Steady growth to keep a close eye on labour and labour costs as they rise too quickly, and to avoid Inflation increases as a result of economic growth (Lee, 2019). The government should establish a Following structural change, a committee will be created to investigate the underlying causes of such old industries. The economy is primarily responsible for Hong Kong’s high crime rate. People lack the abilities needed to carry out complex tasks. Decentralization of industrial output is critical for reducing unemployment. Centralization of industrial activities would result in a loss of employment in underdeveloped areas. As a result, the government should pursue policies that foster industrial decentralization.
Conclusion
In conclusion, in 2019, Hong Kong had an impoverished population of over 1.4 million people and a poverty rate of 21.4 per cent (Trading Economics, 2020). This trend is likely to worsen if the government does not take appropriate steps to mitigate these consequences. The Hong Kong government must also consider all causes of unemployment and implement feasible solutions to reduce the rate. This would have a direct impact on lowering unemployment and, as a result, increasing the country’s economic growth.
References
Hong Kong’s jobless rate at the highest level since 2004. (2019, October 23). Google Scholar. https://www.aa.com.tr/en/Asia-pacific/hong-kong-s-jobless-rate-at-highest-level-since-2004/2178061#:%7E:text=Hong%20Kong’s%20unemployment%20rate%20rose,according%20to%20public%20broadcaster%20RTHK.
The Unemployment Problem In Hong Kong – Free Coursework from Essay.uk.com. (2016, December 13). Google. https://www.essay.uk.com/coursework/the-unemployment-problem-in-hong-kong.php
Unemployment and vacancy in the Hong Kong labour market. (2002, March 11). Taylor & Francis. https://www.tandfonline.com/doi/abs/10.1080/13504850110054959
Qin, M., Su, C. W., & Zhang, S. P. (2020). Tourism and Unemployment in Hong Kong: Is There Any Interaction?. Asian Economics Letters, 1(1), 17222.
Lee, J. (2019). Housing, homeownership and social change in Hong Kong. Routledge.
Lee, S. Y., & Chou, K. L. (2016). Trends in elderly poverty in Hong Kong: A decomposition analysis. Social Indicators Research, 129(2), 551-564.
Peng, C., Fang, L., Wang, J. S. H., Law, Y. W., Zhang, Y., & Yip, P. S. (2019). Determinants of poverty and their variation across the poverty spectrum: evidence from Hong Kong, a high-income society with a high poverty level. Social Indicators Research, 144(1), 219-250.
Guo, Y., Chang, S. S., Sha, F., & Yip, P. S. (2018). Poverty concentration in an affluent city: Geographic variation and correlates of neighbourhood poverty rates in Hong Kong. Plos one, 13(2), e0190566.
Peng, C., Fang, L., Wang, J. S. H., Law, Y. W., Zhang, Y., & Yip, P. S. (2019). Determinants of poverty and their variation across the poverty spectrum: evidence from Hong Kong, a high-income society with a high poverty level. Social Indicators Research, 144(1), 219-250.
TRADING ECONOMICS. (2020, December 3). Hong Kong Unemployment Rate | 1981–2021 Data | 2022–2023 Forecast | Calendar. https://tradingeconomics.com/hong-kong/unemployment-rate
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