The total unemployment rate in Hong Kong hit 3.7 percent in the December to February period, marking the fifth consecutive month it has risen above estimates and the first time in nine years it has been so high. Over the course of 2019, unemployment in the city had been steadily worsening as months of civil unrest took their toll and were added to by the Sino-US trade war; now, with the Covid-19 pandemic weighing even more heavily on the economy, the figures are even less optimistic.
According to a government statement on Tuesday by secretary for labor and welfare Law Chi Kwong, the labor market has “deteriorated sharply” due to the pandemic and will continue to do so. “The labor market will be subject to even greater pressure in the near term, and the exact impact will hinge on the duration and severity of the pandemic around the world,” he said.
On top of this, Dr Law added that inbound tourism, already seriously affected by the civil unrest, had come to a complete standstill. Figures from the Hong Kong Tourism Board show that arrivals plunged by 96 percent in February. The worst affected sector is F&B, where the unemployment rate is now 7.5 percent; other consumption and tourism-related sectors are looking at 6.1 percent. The construction and transportation sectors have also seen a surge in unemployment and underemployment.
The situation can only be expected to worsen as people cut back on their spending because they have lost their jobs, their income has dropped, or they are conserving their money for fear of the first two. The closest comparison to the present situation would be the SARS outbreak in 2003; during that period, unemployment shot up nearly to 9 percent at the height of the outbreak. It is a worrying sign for the months to come.