Increasing The Labor Force And Improving The Workplace Environment

On Nov 17 at the APEC CEO Summit 2018 in Papua New Guinea, Chief Executive Carrie Lam Cheng Yuet-ngor told the press that Hong Kong faces the dual problem of a growing aging population and insufficient labor. In this context, she said, women can be a solution to Hong Kong's labor shortage and that more females should join the workforce. Currently the female labor force participation rate is merely 51 percent. To support this, she said Hong Kong would need to roll out new measures to support working women including more family-friendly policies, better child care practices and related initiatives.

One such measure already taken by the government was the decision to extend maternity leave from 10 to 14 weeks. This was great news indeed and something worth celebrating by all. By doing this Hong Kong will finally meet the International Labor Organization recommendation of at least 14 weeks of maternity leave. Furthermore, paternity leave has been extended from three to five days. As noted by the CE, Hong Kong has one of the lowest fertility rates in the world and a rapidly aging population, and these changes can, in the long run, play a role in ensuring that Hong Kong is provided with a healthier, happier workforce.

However, that announcement was not met with universal approval. Opponents, especially Federation of Hong Kong Industries Chairman Jimmy Kwok, has gone so far as to suggest that responsible workers may not want 14 weeks of maternity leave. The first concern here is that the costs to be shouldered by the employer or taxpayer are too high. However, I would argue that this is an area where the government can invest with the expectation of good returns by subsidizing more extended leave for both parents, thereby encouraging more young mothers to return, or remain in the workplace, after giving birth. Just imagine the increased productivity this will contribute to our total economy.

Returning to the idea of a squeezed labor market, though, it is clear that extended maternity leave is only one "policy lever". We clearly need to look at the bigger picture. If the labor market is so squeezed, why for example, is systematic discrimination against young people and women with children such a feature of employment in Hong Kong? As an Equal Opportunities Commission funded study identified:"Both employers and employees agree that it is understandable not to hire mothers caring for young children, compared with people with other types of family caring responsibilities."

On the other hand, the report found that "In the evaluation of applicants' commitment and promotion potentials, male and female without caring responsibilities consistently receive lower scores than the other four categories". One explanation, the commission concluded, is that the applicants "without caring responsibilities reported the need for leave to develop their hobbies, which is not welcomed in the job market of Hong Kong". In other words, as far as care commitments go, you're damned if you have them, and damned if you don't.

While flimsy excuses are made for this, it seems to ignore the huge contributions that such people could make to the workforce. Although it is very easy to mock millennials for their work habits and consumption preferences (and indeed, to actively discriminate against them), we need to acknowledge that they will make up the entire labor force of the next decades.

Many studies of the future of work and employment have been made, with a strong focus on the impact of automation and mechanization. However, changes in the nature of employment will also be critical. The days of working 40 hours a week in one job, for one employer, for life, are probably numbered. Flexible employers will be able to take advantage of this to better fill their skill gaps, while flexible employees will be able to maximize their potential income.

There is also a challenge to the archaic equation of physical presence to productivity and performance - i.e. presence equals productivity equals money. For a lot of organizations this is simply not the case. Just because a desk is occupied for 40 to 60 hours a week does not mean that you are getting the most out of them. In fact, experiments with four-day working weeks are showing that reduced working hours lead to higher productivity.

Finally, the economic case for investment in early years has unequivocally been shown in studies by Nobel laureate economist James Heckman that policymakers get more for their money by starting at birth. What is good for parents, is good for children; this leads to healthy and productive workers in the future. This is good not only for the employer, but also for the taxpayer.

To return to Jimmy Kwok's claim about "responsible" employees not taking their full maternity leave; one can easily argue the opposite. That having children, giving them the best possible start in life, and returning to the workforce is the ultimate in responsible behavior for citizens and workers. Arguing otherwise is simply short-termism.

Originally posted on China Daily, on 12 July, 2018