Hong Kong has a large and growing labor force. Its numeric strength has increased steadily from 3,000,700 in 1995 to 3,476,600 in 1999, in spite of the 1997-98 financial crisis. Over the last 3 decades, Hong Kong's unemployment rate has usually been small. The average unemployment rate during from 1985 to 1997 was 3.5 percent, as the growing service sector could easily absorb many of those who had lost their manufacturing jobs. During the 2 years prior to the financial crisis, the unemployment rate declined from 3.2 percent in 1995 to 2.6 percent in 1996, and to 2.2 percent in 1997. The crisis and its aftermath pushed the rate up to 4.7 percent in 1998 and 6.2 percent in 1999 (equal to 217,100 people). The latter was a record high for Hong Kong. The rate fell to about 5 percent in 2000.
The overwhelming majority of Hong Kong's work-force is employed in urban economic establishments, due to the insignificance of agriculture. The workforce is a mixture of skilled and unskilled workers. The old and middle-aged manufacturing workers tend to be unskilled or low-skilled, whereas those employed with the growing service industries are more likely to be better educated and possess more advanced skills, including those related to high-tech and information technology. There was a shortage of skilled workers for the service sector as well as for the growing high-tech manufacturing sector in 2000.
In keeping with its emphasis on free enterprise, Hong Kong gives the market the authority to determine wages. Apart from a small number of professions with a uniform wage structure, wages are determined by supply and demand. Individual agreements between employees and employers set wages. Thus, there is no minimum wage except for foreign domestic workers, which was set at about US$500 per month in 1998. Employers of such workers are required by law to provide a decent standard of living for their employees, including housing and food, but the law is not widely observed. Two-income households are common in Hong Kong, although the average wage is usually adequate for most workers and their households. In addition to wages, some employers provide their employees with various kinds of allowances (e.g. free medical services and daycare centers), but employers are not obliged by law to do so. As part of the social safety net, employees are entitled to benefits such as pensions, disability insurance, and food assistance.
Hong Kong is a member of the International Labor Organization (ILO), and has laws and regulations on working conditions. These include laws on safety and health conditions at the workplace verified by government inspections. Workers' safety has improved over the last 2 decades, partly because of such inspections and partly because of the transfer of many high-risk manufacturing jobs to China. Nevertheless, there are still many serious safety problems.
Labor laws also include workers' rights, in accordance with international agreements. For example, the right of association is recognized, and trade unions are legal. There were 558 employee unions in 1998, but they represented only 22 percent of the 3.1 million salaried employees and wage earners. Unions are not strong and are unable to impose collective bargaining on management. Consequently, collective bargaining is not widely practiced as a means of settling labor disputes. Generally speaking, work stoppages and strikes are permitted, but there are some restrictions on civil servants' involvement in such activities. In practice, these activities could lead to loss of employment since most workers must include an article in their employment contracts that their refusal to work is a breach of their contracts. This gives the right to employers to dismiss workers involved in strikes or stoppages. There have not been major strikes or similar labor activities over the last 2 decades.
Hong Kong's labor laws also include provisions to ensure the rights of certain social groups and prevent their exploitation. In general, forced labor is prohibited. Employment of children under the age of 15 in industrial establishments is also prohibited. Nevertheless, children between 13 and 14 years of age with a minimum of 9 years of education can work in certain non-industrial establishments if their employers can ensure their safety, health, and welfare. These children are not allowed to work overtime and cannot work for more than 8 hours a day and 48 hours a week. With the exception of male workers of 16 and 17 years of age, children are not allowed to work in dangerous trades. There is also an anti-discrimination law to protect women in the labor market. Women are well-represented in government and in the civil service (46 percent of senior civil servants are women), but they are not nearly as numerous in other prestigious areas. This includes the judiciary, where only 18 percent of senior employees (judicial officers and judges) are women. The physically and mentally disabled are discriminated against in employment and education in spite of the existence of anti-discriminatory laws.