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Report of the Commissioner for Labour 2000

Chapter 2 : Employment and Major Labour Statistics

The Labour Force and the Labour Market*

* Consequential to the change-over of approach adopted by the Census and Statistics Department for compiling population figures, the figures of 2000 in this section are not strictly comparable with those of the previous years.

Growth Rate of the Labour Force
2.1 The labour force¹ in Hong Kong grew in 2000. It rose to 3.4 million, an increase of 1.2 per cent over a year earlier. (Figure 1)

Note1: The labour force refers to the land-based non-institutional population aged 15 and over who satisfy the criteria for inclusion in the employed population or the unemployed population.

Labour Force Participation Rate
2.2 The labour force participation rate² was 60.7 per cent in 2000, a decrease of 0.2 percentage point over a year earlier.

2.3 Compared with the preceding year, the female labour force participation rate increased by 0.4 percentage point to 49.1 per cent in 2000. Over the same period, the male labour force participation rate dropped by 0.6 percentage point to 73.2 per cent in 2000. (Figure 2)

Note2: The labour force participation rate refers to the proportion of labour force in the land-based non-institutional population aged 15 and over.

Employment in Major Economic Sectors
2.4 The number of employed persons³has registered a growth of 2.6 per cent from 3 133 000 in 1999 to 3 214 400 in 2000. There has been a continuous shift of employment from the manufacturing sector to the services sector in recent years. Dampened by the progressive relocation of the more labour-intensive and lower value-added manufacturing processes across the border, as well as wider application of mechanisation and automation locally, employment in the manufacturing sector continued to show a decline of 5.9 per cent to 338 100 in 2000.

Note3: Employed persons consist of those persons aged 15 and over who have been at work for pay or profit during the seven days before enumeration or who have had formal job attachment. Employed persons include employers, employees (including outworkers), self-employed persons and unpaid family workers.

2.5 The number of employed persons in the services sector⁴ was 2 546 800 in 2000 as compared with 2 457 800 in 1999. Among the services sector, employment in the transport, storage and communications sector and the wholesale, retail and import/export trades, restaurants and hotels sector showed the biggest increases, both by 4.7 per cent. (Figure 3)

Note4: The services sector includes wholesale, retail and import/export trades, restaurants and hotels; transport, storage and communications; financing, insurance, real estate and business services; and community, social and personal services.

2.6 As a result of the economic restructuring, the proportion of production workers in the employed population has been decreasing whereas a large proportion of the employed population has taken up skill-intensive or non-manual jobs. In 2000, managers and administrators, professionals and associate professionals accounted for 29.5 per cent of the total number of employed persons. Clerks, service workers and shop sales workers altogether took up 32.7 per cent; while craft and related workers, plant and machine operators and assemblers only accounted for 18.8 per cent. (Figure 4)

Unemployment and Underemployment
2.7 Due to a smaller growth in the labour force than that of employment, the overall unemployment rate⁵ dropped from a peak of 6.3 per cent in 1999 to 5 per cent in 2000. (Figure 5)

2.8 Comparing the fourth quarter of 2000 with the preceding year, the unemployment rate fell in all major economic sectors. Restaurants, hotels and the wholesale/retail trades showed greater improvement in employment rate. Similarly, there was also marked fall in unemployment rate in the sectors of manufacturing, import/export trade, transport, construction, real estate, communications, business services, financing and insurance.

2.9 The overall underemployment rate⁶ also decreased from 3 per cent in 1999 to 2.8 per cent in 2000. The decrease in the underemployment rate was particularly noticeable in the manufacturing sector and transport, storage and communications sector. (Figure 6)

Note5: For a person aged 15 or over to be classified as unemployed, that person should:
(a) not have had a job and should not have performed any work for pay or profit during the seven days before enumeration; and
(b) have been available for work during the seven days before enumeration; and
(c) have sought work during the 30 days before enumeration.

Besides, if a person aged 15 or over fulfils the conditions (a) and (b) above but has not sought work during the 30 days before enumeration because he/she believed that work was not available, he/she is still classified as unemployed, being regarded as a so-called "discouraged worker". Unemployment rate refers to the proportion of unemployed persons in the labour force.

Note6: Underemployed persons refer to those employed persons who have involuntarily worked less than 35 hours during the seven days before enumeration and have sought additional work during the 30 days before enumeration, or have not sought but have been available for additional work during the seven days before enumeration. Underemployment rate refers to the proportion of underemployed persons in the labour force.

Vacancies
2.10 The total number of vacancies (including those in the Civil Service) was 27 300 in December 2000 as compared with 28 500 in December 1999. Vacancies in the services sectors for December 2000 increased slightly over December 1999 while vacancies for manufacturing and manual workers at construction sites dropped over the same period. (Figure 7)

Wages
2.11 There are no statutory minimum wages in Hong Kong. Wage levels are customarily determined by individual agreements between employers and employees and are subject to the market forces of supply and demand for labour.

Wages and Salary Movements
2.12 The growth rate of wages in nominal terms has reverted to a mild uptrend since mid-2000. A comparison of the overall Nominal Wage Index⁷ of September 2000 over a year earlier showed that the overall wage rate in major economic sectors had increased by 1.1 per cent in nominal terms. After netting out the decline in consumer price, the comparison of Real Wage Index⁸ over the same period showed that the overall wage rate had risen by 3.3 per cent in real terms.

2.13 Of the major economic sectors, after discounting the decrease in consumer prices, the wage index in real terms in manufacturing sector showed the biggest increase of 4.4 per cent in September 2000 over a year earlier. It was followed by the financing, insurance, real estate and business services sector, which recorded an increase of 4.3 per cent. The transport services sector had the highest rate of decrease in real wage index at 1.0 per cent over the same period. (Figure 8)

Note7: The Nominal Wage Index is designed to measure the pure change in wage rates for workers at supervisory level and below by keeping constant the occupational and industrial structure of the labour forces concerned between two consecutive survey periods (i.e. three months).

Note8: The Real Wage Index for each industry is obtained by deflating its nominal counterpart by the Consumer Price Index (A) to discount consumer price changes. The real index indicates changes in the purchasing power of the amount of money earned.

2.14 A comparison of the average daily wages/monthly salaries received by employees engaged in major economic sectors as in September 2000 over a year earlier is given in Figure 9.

Median Hours of Work
2.15 The median hours of work per week for all employed persons was 48 hours in the fourth quarter of 2000, while that for the fourth quarter of 1999 was also 48 hours.

Workers from Outside Hong Kong
2.16 The Government allows workers from outside Hong Kong who possess the skills, knowledge or experience which are of value to and not readily available in Hong Kong to enter for employment. In 2000, a total of 18 740 applications for employment in Hong Kong were approved for professionals, specialists, administrators and managerial personnel. Besides, 101 applications for employment in Hong Kong were approved under the Admission of Talents Scheme, which was introduced in December 1999 to enhance the competitiveness of our economy.

2.17 Separately, to cater for the genuine needs of industry, a Supplementary Labour Scheme, that allows the entry of imported workers to take up jobs at the technician level or below and which cannot be filled locally, was launched on 1 February 1996. In implementing the scheme, it is government policy that local workers should be given priority in filling job vacancies. As at the end of 2000, there were 1 447 imported workers working under the scheme in Hong Kong.

2.18 The Government also allows foreign nationals to enter Hong Kong for employment as domestic helpers. As at the end of 2000, there were 216 790 foreign domestic helpers in Hong Kong.

The Labour Relations Scene
2.19 Good employer and employee relations are essential to social stability and success of the economy. Hong Kong has a long-established and well-tested labour relations system which prescribes basic employment standards and provides an effective mechanism for speedy resolution of industrial conflict.

2.20 In Hong Kong, terms and conditions of employment are negotiated freely between employers and employees and they largely form the basis of the relations between the two parties. The Employment Ordinance lays down the minimum requirements of various employment benefits and conditions in the non-government sector such as rest days, holidays with pay, sickness allowance, maternity protection, severance payment, long service payment, termination of employment contracts, protection against anti-union discrimination and employment protection.

2.21 The Labour Department provides voluntary conciliation service to assist employers and employees in the non-government sector to resolve their disputes.

2.22 Notwithstanding the significant increase in the number of labour disputes and claims and the spate of pay-cut, insolvency, cessation of business and retrenchment brought by the Asian financial crisis in late 1997, the labour relations scene remains stable and generally peaceful. This is reflected by the small number of working days lost due to strikes. The year 2000 registered only five strikes. During 1996 to 2000, the average number of working days lost each year due to industrial conflicts per 1 000 wage earners and salaried employees was 0.43, which is among the lowest in the world. (Figure 10 and 11)

2.23 The Labour Department constantly reviews and initiates improvement to labour legislation on employees' rights and benefits to keep the provisions in step with the social and economic development. In year 2000, the Employment Ordinance was further improved by clarifying that the taking part by an employee in a strike is not a lawful ground for summary dismissal. The Amendment Ordinance was passed by the Legislative Council and came into operation on 7 July 2000.

Occupational Injuries and Industrial Accidents
2.24 Occupational injuries (both industrial and non-industrial) are those injuries arising from work accidents, resulting in death or incapacity for work of over three consecutive days, and reported under the Employees' Compensation Ordinance.

2.25 In 2000, a total of 58 092 occupational injuries occurred, including 199 fatal cases. (Figure 12) There is a drop of 1.3 per cent when compared to 1999. The economic sector containing wholesale and retail trades, restaurants and hotels accounts for 30.4 per cent of all the injuries, and is the highest among all major economic sectors. (Figure 13)

2.26 There were 33 652 industrial accidents in 2000 (Figure 12), decreased by 6.5 per cent in comparison with that of 1999. Out of the 43 industrial fatal cases, 29 occurred on construction sites. The construction and catering industries recorded a total of 24 546, representing 72.9 per cent of the overall industrial accidents. (Figure 14, 15 and 16)

Trade Union Participation Rate*

2.27 Employees in Hong Kong are free to join trade unions, which are required to be registered under the Trade Unions Ordinance. As at the end of 2000, the declared membership of the 594 employee unions was 673 375. (Figure 17) The trade union participation rate⁹ of employee trade unions in 2000 was 22.08 per cent. (Figure 18)

Note9 :
Trade union participation rate
=declared membership of employee unions / number of salaried employees and wage earners X 100%