XN000022-1995-11-09 — Page 5

I would like to start by welcoming you all this afternoon and by addressing what, I suppose, are the basic questions: why are we holding this meeting at all, and why are you all here? I think the answers are simple. Most of us would agree that unemployment is the number one issue on Hong Kong's economic agenda. It causes problems and hardship for those who have lost their jobs, and it causes worry to those who fear that they may lose their jobs.

It is true, of course, that unemployment is far higher in most other places; so is crime; so is drug abuse. But just as with those social issues we have acted, so we want to take steps on employment which will avoid the problems that other people face elsewhere in the world. And why are you all here? Well, I presume it is because you share my view that we will tackle these problems best if we try to tackle them together.

I must say, I personally hate the expression "the two sides of industry". I think antagonism and conflict are both unnecessary and undesirable in industry and in industrial relations. We are all in this together in Hong Kong; our interests, I think, are the same, and we should all work together.

I hope we can look beyond our own propaganda at what has happened in Hong Kong in the last few years, and what is actually happening today. In the last 15 years, the size of the local labour force has grown by more than one-third but unemployment has stayed at below five per cent throughout that period. Over the same span of years, manufacturing industries have shed 450,000 jobs but the number of people employed in private services has gone up by 1.1 million. What does that tell us? Well, among other things, that we must have got some of the fundamentals right in Hong Kong in order to have made those transitions so well. For example, the productivity

improvements by our own workforce have been excellent.

Why has unemployment grown recently? I think the figures are compelling because there has been an unusually fast increase in the size of the labour force which has outstripped the increase in the number of jobs available. From 1987-1992 the size of the labour force in Hong Kong increased by 60,000. In three of those five years, the number of people in the labour force actually fell. In 1993 and 1994 the labour force grew by 180,000, mainly because of returning former emigrants and legal Chinese immigrants. The most recent figures show a 4.3 per cent increase in the labour force year on year. But job creation has lagged behind that very substantial increase in the size of our labour force, partly because of flat consumer spending with the impact that that has had on jobs in catering and retail industries in particular.