Rapid Employment Growth In Hong Kong
Some pundits have recently suggested that the continued high unemployment and low employment in the U.S., is in part the result of some long term structural factyors resulting from high tech and globalization and in part the result of a lack of labor regulations. Regarding globalization, trade with China is the most popular scape goat.
Yet Hong Kong, whose by far biggest trading partner is mainland China, whose economy is at least as technological and far more globalized (Both exports and imports are significantly bigger than GDP) and who is the world's freest economy, saw its unemployment rate drop to 4%, while its underemployment rate (the share of workers who work part time even though they would prefer a full-time job) fell to 1.8%. The underemployment rate was at a new low while the full time unemployment rate is just a few tenths of a percentage points above the cyclical lows reached before the 2008-09 global slump.
All of this happened despite a big increase in labor force participation.
While the Hong Kong success story of course can be partially attributed to the boom in mainland China, this success alse reflects its relative laissez faire policies. It also shows that there is nothing inevitable about higher unemployment-and that trade with China and other low income countries does not cause unemployment.
Yet Hong Kong, whose by far biggest trading partner is mainland China, whose economy is at least as technological and far more globalized (Both exports and imports are significantly bigger than GDP) and who is the world's freest economy, saw its unemployment rate drop to 4%, while its underemployment rate (the share of workers who work part time even though they would prefer a full-time job) fell to 1.8%. The underemployment rate was at a new low while the full time unemployment rate is just a few tenths of a percentage points above the cyclical lows reached before the 2008-09 global slump.
All of this happened despite a big increase in labor force participation.
While the Hong Kong success story of course can be partially attributed to the boom in mainland China, this success alse reflects its relative laissez faire policies. It also shows that there is nothing inevitable about higher unemployment-and that trade with China and other low income countries does not cause unemployment.
posted by stefankarlsson at 10:40 PM
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