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Written by: Commentary Editing Room
2020-09-15 17:40
Last update date: 2020-09-15 17:40
The application for the second round of the "Ensure Employment" program closed on Sunday (13th), and the number of employers that applied did not rise but fell.
One of the reasons is that the epidemic is not over. Some companies will consider laying off employees or closing their businesses because they can't see the future. They don't want to be tied to conditions by the government to restrict their business decisions.
The enthusiasm of employers participating in the plan also reflects the business's judgment on the future economic cold and heat. It can be imagined that the unemployment rate has not yet peaked.
Therefore, in addition to "guaranteeing jobs," the government should also prepare in advance to start with "guaranteeing livelihoods" to ease the risk of layoffs.
The second round of the Employment Guarantee Program received more than 184,000 applications, including more than 158,000 employers and more than 26,000 self-employed persons.
Although the government described the second phase of the employment guarantee plan as "good response" and believes that the plan "can continue to achieve the purpose of job retention", the number of employer applications is about 10,000 fewer than the previous period, and about 7,000 have received Employers who pay wage subsidies give up participation, which makes the government's wishful thinking may not come true.
Commercial restructuring or layoffs
The government’s funding of subsidies for employees’ salaries may sound like "a great deal" at first, but as pointed out by Liu Dabang, Permanent Honorary Chairman of the Association of Small and Medium Enterprises, some members of the Association are burdened with heavy rental expenses because they do not see economic prospects. Obtain government subsidies, but may not be enough to meet operating expenses, so they will choose to lay off staff or temporarily close their businesses instead of participating in the plan.
Such business considerations are not only for small and medium-sized enterprises, even Cathay Pacific, which employs more than 20,000 people in Hong Kong, stated last week that it will no longer apply for the "Protected Employment" program and intends to reorganize the company to replace it.
The increase in unemployment rate is caused by the epidemic. Although the government cannot be blamed entirely on it, if the government fails to achieve the expected goals, the government will have to find other channels to repair inadequately.
The original intent and promise of the "Ensure Employment" plan is that employers will not lay off employees during the period when they receive government wage subsidies, and will use the full amount of wage subsidies for employees' salaries. However, it can be seen from the loopholes in the first round that not only are there many employers who abuse the plan. Moreover, the monitoring mechanism and fines are also difficult to enforce, so they can only be regarded as hedging rather than measures to solve the economic downturn.
The Hong Kong government cannot and should not force employers to participate in the second round of the "Ensure Employment" program. However, given that the unemployment rate has continued to rise in recent months, the government can not only stabilize the number of jobs from the top down, but also consider stimulating consumption from the bottom up. Market, lest the tide of business closures intensify.
Money saving in old bottles and wine
It is a pity that in the "Anti-epidemic Fund 3.0" announced by Chief Secretary for Administration Zhang Jianzong and Financial Secretary Chen Maobo on Tuesday (15th), no innovative countermeasures have been seen, just old bottles of old wine.
For example, one-off measures such as subsidizing markets to set up electronic payment systems, extending the special CSSA assistance scheme for the unemployed, continuing to waive or reduce government fees and property rents, and optimizing the financing guarantee scheme for SMEs are too weak to qualify.
Although Zhang Jianzong argued that this was a decision to balance the government's fiscal revenue and expenditure and the economic environment, the Hong Kong government tightened its pants at a critical juncture and repeatedly emphasized the principle of "prudent financial management". Not only did it ignore the stability of Hong Kong's public finances, it was far better than many. At the same time, developed countries in Europe and the United States also have the opportunity to let the economic crisis ferment due to small losses, and eventually lead to a vicious circle.
Although according to Chen Maobo, this fiscal year is expected to have a deficit of 300 billion yuan, but reserves still amount to 800 billion yuan, and the government is absolutely capable of helping them out.
Since the effectiveness of subsidizing employers is gradually diminishing, the government may also consider increasing unemployment protection from the perspective of employees. This can not only make up for the shortcomings of the "Ensure Employment" plan, but also stimulate the consumer market and reduce employers’ incentives for layoffs and closures. .
After the outbreak of the epidemic, the Hong Kong government was only willing to lower the threshold for applying for CSSA. Not only did this fail to take into account the wider number of working people, the number of unemployment CSSA claims in July fell by 1.3% month-on-month, which was entirely in line with the rising unemployment rate. Deviation proves limited effect.
If the government considers the introduction of unemployment assistance at this time, it will not only alleviate employees’ worries about the uncertain prospects, reduce the pressure of accumulating grains to prevent hunger, and stimulate consumption. In the long run, it will also give the most vulnerable economic structure in the era of mechanization and intelligence in the job market. Grassroots workers who have been eliminated through changes have a basic livelihood guarantee.
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