Hong Kong labour market weakens amid recession

Bloomberg

After months of political protests and the onset of a recession, Hong Kong’s resilient labour market is starting to crack.
Retailers, restaurants and hotels are cutting wages and hours or letting staff go just to survive. The city’s once record-low unemployment level is likely to accelerate its current rise if no solution to the five months of turmoil can be found.
Nestor Manuel, 21, is among those affected. He has recently taken a new job as a floor supervisor at Mint Supper Club in Hong Kong’s nightlife district after having to shift roles multiple times in recent months. A floor supervisor helps to manage the customer-facing side of a restaurant. “I’ve had to switch two times in the past six months during this protest because companies couldn’t afford me anymore,” he said. “It’s sad to see the industry I love dying.”
Manuel’s previous employer cut salaries at first to hang onto employees, yet soon had to take more drastic steps.
While Hong Kong’s overall unemployment rate had remained below 3% since January 2018, that strength is waning. The rate rose to 3.1% in October, more than the 3.0% forecast in a Bloomberg survey of economists, data showed.
Meanwhile, the rate in the consumption and tourism-related sector, which includes retail, accommodation and food services, is showing greater signs of strain. It rose to 5.0% for the August-to-October period, the highest since early 2017.
“The labour indicators may remain stable for some time with the alternative measures like unpaid leave or so, but it won’t remain stable for long. The labour market will feel growing pain in the following months.” said Qian Wan of Bloomberg Economics.
Things were even worse in the food sector, where unemployment hit 6.1%, the highest in more than six years.
Ginevra Tonelli, a sales assistant at a clothing shop in Hong Kong, said her shop keeps watch on other stores on the street shutting their doors to decide if they need to do the same.