Community organisations urge government to offer short-term unemployment allowance

A survey several community organisations conducted found a 400 per cent spike in unemployment among respondents. It also found that nearly 30 per cent of respondents’ employers have suggested that they will lay off workers. 

The ‘Survey on low-income families’ employment situation amidst the epidemic’ (Chi only) was announced today. It was conducted by Oxfam Hong Kong together with Agape Community Care Centre of Kwun Tong Methodist Social Service, Concerning CSSA and Low Income Alliance and Hong Kong People Service Centre. 

The findings reflect how unemployment has seriously affected the lives of low-income families. Oxfam and its partners thus urge the HKSAR Government to provide a short-term, monthly unemployment allowance of HK$5,800 to those affected.

The 364 families who were interviewed either lived in a subdivided flat, or their monthly income was lower than 70 per cent of the Hong Kong median income. Respondents were interviewed over the phone between 16 and 22 March 2020.

The survey also found that the number of unemployed people increased from 32 to 161 – a 400 per cent increase – since Chinese New Year (CNY). Further, part-time and casual job opportunities had decreased; 38.6 per cent and 47 per cent fewer respondents worked part-time or casual jobs respectively since CNY.

As for the causes, as many as 30 per cent of respondents attributed unemployment to the lack of part-time/casual work opportunities. A further 21.7 per cent attributed it to company layoffs, while 13 per cent cited company closures.

The pandemic has affected a wide range of industries. However, workers with little bargaining power are often the first to be laid off or affected when employers cut costs.

Even respondents who have been able to keep their jobs are filled with worry. A total of 26.2 per cent of respondents knew of impending layoffs at their companies, and nearly 30 per cent said their employers had hinted at future layoffs. A further 13.8 per cent said their employer had even required workers to resign on their own. 

To make ends meet, more than 70 per cent of respondents indicated that they would reduce their daily food expenses and go out less; 37 per cent even said they needed to borrow money from relatives and friends.

In the survey, 75.2 per cent of respondents said they had little or extremely little confidence that they would be able to keep their job or find one. Ninety per cent of respondents also said that the epidemic had severely or very severely impacted their families’ livelihoods. 

Nearly 80 per cent said that the establishment of a short-term unemployment allowance would help them, while 55 per cent believed creating more short-term employment opportunities would be helpful.

The Census and Statistics Department recently announced that the latest local unemployment rate stood at 3.7 per cent – the highest in nearly nine years. The total number of employed persons had also decreased by about 34,400 compared to the fourth quarter of 2019. However, Oxfam and its partners’ survey found that the situation is far worse among low-income families, and that official statistics do not reflect the reality they are experiencing.

To relieve the difficulties low-income families are facing, Oxfam and its partners have the following policy recommendations.

Firstly, the Government should provide a short-term unemployment allowance for at least six months for unemployed and underemployed people from low-income families receiving assistance from the Working Family Allowance or Student Financial Assistance Schemes. Since the Working Family Allowance does not protect the unemployed or those who do not work enough hours as specified by the Allowance, and since casual workers or those forced to resign are not entitled to severance payment and long service payment, there is a need to provide additional support to these people. 

This cash allowance should be set at HK$5,800 per month (taking reference to the allowance level from the Employees Retraining Board), and the amount should be adjusted based on the number of people in each family.

As for low-income families that are not recipients of any of the aforementioned allowances, and those without children, the Government should provide a special allowance through The Community Care Fund to meet their urgent needs.

Further, the Government should offer unemployment insurance to provide additional protection to low-income workers. When studying the feasibility of establishing this, it should take reference to the UK, US, Japan and South Korea’s experience. 

The Government should also create more short-term jobs – by taking reference to the SARS experience – and improve training through the Employees Retraining Board. The Employees Retraining Board should also extend the maximum monthly allowance to more courses, so more workers from different industries obtain training, and improve their employability.

Finally, the novel coronavirus should be added to the prescribed occupational diseases under the Employee’s Compensation Ordinance. By doing so, workers who catch the virus would be able to receive compensation and secure their livelihoods when they cannot work.