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The Government Interventions in Labour Market in Hong Kong

Essay by   •  March 27, 2013  •  Case Study  •  1,364 Words (6 Pages)  •  1,542 Views

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A research conducted before the imposition of the law discovered that some low income workers cannot earn enough for living even they work for long hours due to the pity low wage that they were earning. They could not fight for a higher salary as they are of high age level.

It is therefore not surprise for us to know that there were a certain percentage of extremely low wage earners. Thus, the presence of the regulations is required to protect these low income workers to bargain for reasonable salary, and prevent them from being exploited.

Some experts said to foresee a great increase in unemployment rate as it is impossible for firms to hire all the people who's willing to work at the wage level, which is the excess supply of workers shown in the graph.

However, the unemployment rate of Hong Kong remained at a low level, which showed that, the introduction of minimum wage law do not lead to the great economic deterioration as people perceived. Instead, it has protect all participants in the labor market, including the disables. Around 310,000 low paid employees are benefited under the law.

On the other hand, critic has predicted that firms will suffer great economic pressure. It will lead to an increment in the operating cost. Thus will slow down the companies' plans, or even lead to the bankruptcy. However, the major burden of running a business are in fact the raw material price hike and high rent. The insignificantly increased in wage has only accounted for a small proportion of total.

The minimum wage law is a policy to protect the benefits of employees, bring more wealth to the low-income families and narrow the wealth gap. It causes a benefit shift from the employers to the employees and from the rich to the poor. However, it has increased the incentives and productivity of the workers, which enhance the efficiency and competitiveness of the market.

In the second place, there are several plans and programs that are organized by the government for coping the situation and trend of enhancing the labour market's efficiency and equitability. Those programs can be divided into two domains, which are training plans and orientational strategies.

In thorough, those training programs are raising the educational level and talkent of the low educational level workers and employees. Pre-employment training scheme, for instance, Youth pre-employment training program and Youth Work experience scheme are the core of government interventions in dealing with labour market's efficiency and equitability.

With the perspective to the employees, these programs shall deliver adequte amount of on the job training when they peform duties in the organizations with the fit into employees' preference.

From the point of view of the employers, these programs shall reduce the time lag necessity to fit with the one seeking jobs with their skills for incurring high information cost

On the other hand, in the side of the employees, the working orientation and placement scheme shall accquire work experience from organization and meet their employees. Whereas the view of employers, the program will definitely increase the average productivity of the workers in a more effective way and channel for resulting in better-quality outputs of firms.

It is known that Market information is imperfect; it required matching time for the job seekers to find a suitable jobs. Also, It is difficult for employers to hire a good employee. The employer has to make investigations on the background of the applicants and organize series of interviews, which incurred high information cost. Hence, recruitment programs have been launched. This program can be divided into 4 parts.

To begin with, there is website which provides information for Job seekers and employers. When Job seekers enter the website, they can see the job vacancies from difference industries. If they find a suitable job, they can register immediately and wait for the interview as well as the result.

Second, Job Fairs. Job Fairs will be held from time to time which gather companies in the same industry to recruit labors. Besides, it allows the unemployed people to have a quick matching in employment.

Third, Job Centers. These centers provide vacancies information and facilities support



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