Hang in there

Fluctuations in the local unemployment are set to continue for some time. This requires sustained support and new solutions from the authorities


Although the city’s unemployment situation is less severe than other regions amid the unprecedented Covid-19 pandemic, the local jobless rate has still hovered at one of the highest levels  in the recent decade, prompting the administration to exhaust its bag of tricks to ensure the local employment for the sake of social stability, from streamlining the number of non-resident workers to more subsidised training schemes.

Latest official figures show the city’s jobless rate deteriorated again to 2.9 percent in the December-February period, while the unemployment indicator for residents was even worse at 3.9 percent, rebounding from 3.7 percent in the November-January period. This put a halt to a recovering streak since last August when the unemployment rate of residents was once as high as 4.1 percent. Meanwhile, the underemployment rate of residents, the indicators for those work less than 35 hours a week involuntarily, reached 6.2 percent in the last quarter of 2020, the highest since the quarterly data was available in 2012.

Kwan Fung, an Assistant Professor of Economics at the University of Macau (UM), explains the fluctuations of the unemployment data were expected as “the pandemic has dragged on for a very long time”, adding: “There won’t be any drastic decline [in the near future] but there also won’t be any significant improvement.”

Despite a daily tally of about 30,000 visitors in April, the highest level in 15 months, the visitor arrivals to the city in recent weeks only translated to about 30 percent of the pre-pandemic volume. Expecting the current labour market fundamentals would remain for at least half a year, the academic further said: “The unemployment situation will only be significantly improved when the number of visitors arrivals has surged, hand-in-hand with the stable progress of Covid-19 vaccination around the world.”

The Centre for Macau Studies and Department of Economics at UM have recently published the latest 2021 Macao Macroeconomic Forecast, which envisaged the overall jobless rate in the city would improve to 2.2-2.3 percent by the end of this year while the figure for resident workers only would reach 3.2-3.3 percent.


“The unemployment situation will only be significantly improved when the number of visitors arrivals has surged, hand-in-hand with the stable progress of Covid-19 vaccination around the world,” says Kwan Fung

Downsize

In the meanwhile, prior to the recovery of the economy and the employment situation, one of the avenues for the government to ensure the local employment is the downside of non-resident workers. In a recent session with the Legislative Assembly in April, Chief Executive Ho Iat Seng pledged: “The government has continuously trimmed down the number of non-resident workers… since the end of 2019, and [we] have not approved any new requests.” Talking about the gaming operators, which are among the city’s largest employers, the official added the authorities are willing to be in talks with them about possible openings for residents should the local be interested in the jobs that might have long working hours.

Latest figures from the Labour Affairs Bureau (DSAL) show there were 173,113 non-resident employees in Macau by the first quarter of 2021, 10.5 percent fewer or nearly 20,400 workers less than January 2020 before the coronavirus outbreak has started to wreak havoc in the territory and beyond. The number of unskilled employees declined 11.1 percent over the same time period to 138,876 and the slump was slightly larger at 12.6 percent to 5,609 skilled non-resident workers, in addition to a 7.4-percent decline in the number of domestic helpers to 28,628.

“Though there are about [20,000] non-resident workers fewer now and about 10,000 [residents] looking for jobs, this does not mean all those residents could fill up the positions vacated by them,” says legislator Leong Sun Iok. “While the exit of some non-resident workers are due to the non-renewal of the quota by the authorities, in many cases, businesses laid off non-resident workers voluntarily to cut down the operating costs,” the lawmaker from the Macau Federation of Trade Unions, the city’s largest labour group, explains.


“With the new batch of [university] graduates the local unemployment situation might further deteriorate,” says legislator Leong Sun Iok

Ups and downs

The industries that have been hard hit by the pandemic, such as tourism-related fields, saw the biggest declines in their non-resident labour force. The number of non-resident employees in the city’s six gaming operators totalled about 26,100 by the end of 2020, latest official figures show, accounting for 24.2 percent of the total labour force and representing a slide of over 25 percent — or 9,000 workers less — from a year earlier.  

Another set of DSAL data also indicated the number of unskilled and skilled imported workers in the overall gaming and entertainment sector plunged 19.2 percent and 19.1 percent respectively from Jan 2020 to 11,772 and 860 by the end of the first quarter this year. The hotel sector also took a beating with a 28.7 percent decline in the non-resident labour force to 22,539 by end-March 2021. The food and beverage sector and the retail segment fared out better, with the tally of non-resident workers declining 9 percent and 9.3 percent respectively to 21,197 and 21,100 by the first quarter.

But not all the industries have gone south. In spite of fallouts in early months of the pandemic, the number of non-resident employees in the construction sector returned to the pre-Covid-19 level at 26,749 by the first quarter of 2021 — even slightly up from 26,116 by January 2020 — as the government has committed to bolster investments in public works to sustain the economy in the absence of travellers. The financial segment also maintained the headcount of labour importation at 1,041 by end-March, slightly down by 1.5 percent from January 2020, but the number of skilled workers in the segment rose 4.8 percent to 328 over the same time period.

3.2-3.3%
– UM’s projection of resident unemployment rate by end-2021

No choices

Fong Kin Fu, president of the Federal General Commercial Association of Macau Small and Medium Enterprises, also acknowledges some residents have filled up the positions vacated by non-resident workers, for instance, in the fields of dining and retail for small and medium-sized enterprises (SMEs). “But [residents] are only interested in those positions as they have no choices, given the sluggish economy and low labour demand of [large] corporations,” he says. “When they have choices they would not be interested in [these positions].”

Thus, the businessman expects when the local economy starts to regain an upward momentum amid the return of travellers the number of non-resident employees will climb due to the demand of SMEs and residents searching for other job types.

In the perspective of Mr. Leong from the labour group, some businesses hire non-resident workers, who have lower salaries than residents, to lower the operating costs. “But it should be made clear that local laws mandate labour importation as a means to complement the shortage in the local workforce but not for companies to cut down operating costs,” he says, suggesting, for instance, the government could request a minimum threshold of local workers when commissioning a third party for services or public works to better ensure local employment.

20,400
– No of non-resident workers here losing the jobs during the pandemic

No-paid leave

As the summer approaches, thousands of fresh graduates from universities or even secondary schools will look for jobs in the market. “Over 1,000 graduates last year have still not successfully landed a job as of now,” the lawmaker claims. “With the new batch of graduates the local unemployment situation might further deteriorate.” Latest official figures show the unemployment rate of residents aged 16-24 was 14.2 percent in the final quarter of 2020, ameliorating from the historic high of 18.2 percent in the preceding quarter but still hovering at a high level.

Besides collaborating with local private companies in offering subsidised internship schemes for the youth and fresh graduates, Mr. Leong adds the government could also liaise with the mainland authorities and firms to provide more internship quota for the local youth, or even create internship schemes for them to work in local public bodies, so as to alleviate the youth joblessness.

Though workers could keep their jobs they might be forced to take no-paid leave, a phenomenon that has not been uncommon in the city amid the public health crisis. A survey by Mr. Leong’s association this year found about 56 percent of 594 interviewees had been asked to take no-paid leave in the past three months.

“Workers have no choices but have to take no-paid leave in the current situation… which severely impacts their earnings,” he says. “The authorities should look into this and see how they could better protect [the rights of] workers, such as more regulations.”