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Appendix A
Hong Kong's labour market
a summa
Summary report
1. Communication of information about vacancies. 2. Wage comparison.
3. Restrictions on the physical mobility of labour. 4. Employers' attempts to 'commit' labour.
5. Patterns of mobility in the labour force:
(a) vertical mobility within the wages sector
(b) horizontal mobility within the wages sector
(c) mobility between the wages and non-wage sector.
6. Elements of stability in the labour force.
7. Segmentation of the labour market.
8. The part played by combinations of workers in regulating the labour market. 9. The part played by combinations of employers in regulating the labour market. 10. Government's role in the operation of the labour market:
(a) its own pay policies and labour relations
(b) its effect on private sector wages
(c) legislation producing labour market rigidities. 11. How are wages determined in Hong Kong? 12. Policy conclusions.
In the absence of organized collective bargaining, how near does the Hong Kong labour market approximate to the free competitive model? What imperfections and and rigidities have developed in this labour market and what are the consequences for the determination of wages? Could the welfare of the mass of Hong Kong's workers be materially improved by legislation aimed at bringing industrial relations nearer to the collective bargaining model?
1. Communication of information about vacancies:
The high density of industrial establishments and Hong Kong's small size makes for ease of communication in the labour market: factories of different type are often crowded together in the same building and workers are commonly supposed to spend much time enquiring about openings elsewhere. Lunchtime sightseeing tours, word of month information (which Hong Kong's cheap and ubiquitous telephone helps to spread) and factory-wall posters advertising vacancies are the most common means of finding out about available jobs. The firms make some use of newspaper and TV advertising, and, for high grades of labour, may make direct contact with a potential employee (poaching). These information flows are generally so effective that few workers ever call up the government's employment services, which fills a
Some minimal number of jobs annually, mostly for non-manual workers. government departments help to bring employees and applicants together e.g. the industrial training section of the Labour office, the Marine Dept. etc. Firms which are desperately short of labour have been known to tour housing estates in buses; and the system of paying employees a recruitment bonus for limited periods of shortage has been adopted in the fastest growing manufacturing industries (c.g. electronics).
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All of this implies a relatively free, competitive labour market, which information is in itself no restraint on worker mobility. But there are some sectors where workers depend on intermediaries to find them employment: the traditional pattern of Chinese employment, which probably persists in some sectors, (e.g. trade), emphasised particularism at the expense of open competition. In such a situation jobseekers depend on family and friends to serve an introduction to employment: this particularism lewds itself to a narrower view of the labour market and to restricted information about the availability of jobs. Again, workers may be tied to a particular