Anisha Bhaduri says ensuring the creation of ample and suitable opportunities for the most vulnerable in society should not be a tall order

Hong Kong expanded its real gross domestic product 3.1 percent year-on-year in the first quarter, up from 2.5 percent in the preceding quarter, but by the admission of authorities, “The labor market remained tight in the first quarter of 2025.”

Government data suggest that the seasonally adjusted unemployment rate stood at 3.2 percent in the first quarter of 2025, up from 3.1 percent in the preceding quarter. The hardest hit sectors were construction (up 0.6 percentage points from the previous quarter to 5 percent), and low-paying sectors such as food and beverage (up 0.6 percentage points to 5.3 percent) and retail (at 4.3 percent — up from 3.3 percent in the first quarter of 2024). Even the accommodation services and finance sectors took a hit.

The Minimum Wage Commission identifies low-paying sectors as retail (including supermarkets and convenience stores, and other retail stores); food-and-beverage services (including Chinese restaurants, non-Chinese restaurants, fast-food cafes, Hong Kong-style tea cafes, and other food-and-beverage services); estate management, security and cleaning services (including real estate maintenance management, security services, cleaning services and membership organizations); other low-paying sectors, including elderly homes; laundry and dry cleaning services; hairdressing and other personal services; local courier services; and food processing and production.

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Looking at the data, the unemployment rate for the February-April 2025 period rose to 3.4 percent, an increase of 0.2 percentage points compared with the January-March rate. The underemployment rate for the February-April period increased to 1.3 percent, also a 0.2 percentage point rise compared with the January-March rate, according to Census and Statistics Department figures.

If we look at absolute numbers, which personalize data to focus the lens on real people, total employment decreased around 15,600 from about 3.69 million over January-March 2025 to about 3.67 million during February-April 2025. Over the same period, the labor force shrank around 9,000 from around 3.81 million to around 3.80 million.

The number of unemployed people (not seasonally adjusted) increased around 6,600 from 122,800 during January-March 2025 to 129,400 over February-April 2025. Over the same period, the number of underemployed people also increased around 4,900 from 42,700 to 47,600. In the first quarter, the number of people unemployed for six months or more increased 18.5 percent.

Crucially, more notable increases in unemployment rates in the first quarter of 2025 from the preceding quarter were seen for those aged 20-24 (up 0.5 percentage point to 9.1 percent) and those with lower secondary education and below (up 0.5 percentage point to 3.8 percent). Even those aged 50-59 (up 0.5 percentage point to 3.4 percent) fared badly.

To put it simply, young people in their early 20s who didn’t finish secondary school were among the hardest hit in the job market, along with those above 50. Obviously, the benefits of the much-touted “record-high” number of 1.46 million companies registered in Hong Kong at the end of 2024 had not percolated down much to the young and the middle-aged with low educational attainment. Even multiple low-paying sectors don’t seem to have benefited much.

The food-and-beverage sector — considered a low-paying sector — remained the most vulnerable, with a 5.3 percent unemployment rate. As widely reported quoting Food and Environmental Hygiene Department data, 255 restaurants closed from April 2024 through 2025 with 17,154 restaurant licenses remaining valid as of the end of April.

Total restaurant receipts in the first quarter of 2025 decreased 0.6 percent year-on-year to stand provisionally at HK$28 billion ($3.57 billion), the Census and Statistics Department revealed. Significantly, receipts of Chinese restaurants decreased 4.9 percent year-on-year in value and 6.5 percent in volume over the same period as Hong Kong residents explored dining options further afield.

While changing dining habits did contribute to this, this sector has also been vocal about the rampant dismissal of local staff in favor of imported workers.

Secretary for Labour and Welfare Chris Sun Yuk-han pledged inspections and random checks to ensure that employers who hired one imported staff member should have hired at least two residents as per law. But the fact remains that 54,278 nonlocal workers were approved to work in Hong Kong from September 2023 through March 2025 — when authorities suspended the ceiling on low-skilled nonlocal hires to launch the Enhanced Supplementary Labour Scheme (ESLS). While the initiative is set to expire in September, it has so far brought to Hong Kong 8,971 wait staff, 6,172 junior cooks, 3,879 sales assistants and 2,404 warehouse keepers — the four most-popular occupations filled by imported workers, as per Labour and Welfare Bureau data.

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On April 16, responding to Legislative Council member Lau Kwok-fan’s question on local employment rates in job categories under ESLS, the labor and welfare secretary said, “The C&SD does not compile statistics on local employment rate by job categories under the ESLS.”

To Lau’s question on “whether the authorities have assessed, upon implementation of the ESLS, the specific impact of imported workers on the local labor market”, Sun’s noncommittal response was the Labour Department was “closely monitoring the employment market situation”.

In a city with among the highest income disparity in the world, policy reactions in a free economy to both a labor shortage and low employment — especially in low-paying sectors such as food and beverage and retail — should neither be knee-jerk nor apathetic to low-paid local workers.

A robust rate of employment must be aided by the creation of ample and suitable opportunities, a policy framework to ensure that the opportunities are equitable and accessible, and oversight to guarantee that it is not exploitative — especially for the most vulnerable — or unlawful.

Surely, it is not a tall order.

The author is an award-winning English-language fiction writer and current-affairs commentator.

The views do not necessarily reflect those of China Daily.