By Oxfam Hong Kong director Wong Shek Hung
Imagine for a moment that it is still 2019. You work nine hours a day, six days a week and make barely more than the minimum wage (HK$37.50 an hour). You live in a subdivided flat with your husband and child. Rent for the 130-square-foot room you call home takes up most of what you make each month, but thankfully, your family is managing to scrape by.
Then 2020 rolls around, Covid-19 hits and you find yourself unemployed. Your spouse gets news that he too has just been furloughed. You both frantically look for jobs, but a month passes by without a callback. Then two. Then six.
This is the reality for many of the working poor. While few have escaped unscathed from the economic fallout of Covid-19, it is disproportionately affecting the poorest pockets of society.
Our latest report shows that of the 257,000 people who are currently unemployed, close to 110,000 are from poor households – a dramatic increase of 1.6 times year-on-year. Over half have been unemployed for over three months, and more than 20 per cent for over half a year.
While the government’s initiatives to address unemployment earlier this year – like the Employment Support Scheme – might not have been enough to push unemployment down to pre-pandemic levels, it temporarily eased the struggles of many workers. But now, given the fourth wave of the pandemic, the lack of pragmatic measures is only casting a pall of uncertainty and perhaps gloom for the poor and unemployed.
What about the Comprehensive Social Security Assistance (CSSA) scheme that has been touted by the government as the solution? Our research suggests that 75 per cent of the 110,000 who are poor and unemployed are slipping through the cracks. Despite relaxed requirements, like lowering the asset limits and disregarding insurance policies as assets, many are still not eligible, and there are countless hoops which applicants must jump through. The social stigma of relying on the CSSA also makes the scheme ineffectual.
What would be more efficacious at a time like this is a short-term unemployment allowance. Just HK$5,000 a month for half a year, for instance, is not too much to ask if you think about it. It would certainly still be a challenge to pay for basic expenses each month, but it would be a start. It is also a more than viable option that the government actually considered at the beginning of the year. It would only need to spend HK$2.4 billion on this initiative – a far cry from the HK$80 billion spent on the Employment Support Scheme. And doing this would offer timely assistance to about 80,000 people. People like Ping, 46, and her husband.
Ping was furloughed from her job at a restaurant earlier this year because of Covid-19. And her husband, a taxi driver, now only makes enough to cover the cost of renting the taxi he drives. With two children to support, their situation was getting desperate. Thankfully, Ping found work by packing meal kits for our food assistance project, Give a Meal, which offers nutritious meal kits to low-income families, since many save on food or even skip meals when times get tough.
While timely initiatives like this have allowed people like Ping to breathe a momentary sigh of relief, there are too many out there like her. We need more sustainable solutions. Aside from a short-term allowance, the government should offer the poor and unemployed opportunities to learn new skills. By expanding the Employment Retraining Board’s courses supported through the Love Upgrading Special Scheme 2, for instance, those who are now unemployed can find a way to start anew in other industries.
In the long run though, it is imperative that the government design a more forceful and intentional response to address working poverty, starting with the minimum wage. Before the pandemic, hundreds of thousands – many of whom were essential workers – were existing on a shoestring despite keeping their noses to the grindstone.
For many, the minimum wage is barely enough because it is only inflation-adjusted once every two years. And in a farcical move the government is considering a minimum wage freeze for the next two years, which would make the poor even poorer. Such a move would also ignore those who are still employed: workers who do not have the luxury of working from home; those who lack worker protections and are at greater risk of being exposed to Covid-19.
The government must therefore raise the minimum wage from HK$37.5 to at least HK$41.4. They must also review it every year to ensure it keeps pace with inflation, allows workers to support one other person and is no less than CSSA payments so that people remain motivated to work. Doing this, however, is quite honestly the bare minimum.
The truth is, the solution to unemployment among the working poor isn’t elusive or convoluted. There are many ways to stop plunging the poor deeper into poverty. It is simply a matter of will.
Wong Shek Hung is the acting director of the Hong Kong, Macau and Taiwan Programme for Oxfam Hong Kong.
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