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Labour Force and Unemployment

Labour Force and Unemployment

Statistics on labour force, unemployment and underemployment are compiled based on data obtained from the General Household Survey.

The labour force refers to the land-based non-institutional population aged 15 and over who satisfy the criteria for inclusion in the employed population or the unemployed population. The labour force participation rate refers to the proportion of labour force in the land-based non-institutional population aged 15 and over.

The employed population consists of persons aged 15 and over who have been at work for pay or profit during the 7 days before enumeration or who have had formal job attachment.

The unemployed population comprises all those persons aged 15 and over who fulfil the following conditions :

  1. have not had a job and have not performed any work for pay or profit during the 7 days before enumeration; and
  2. have been available for work during the 7 days before enumeration; and
  3. have sought work during the 30 days before enumeration.

However, if a person aged 15 or over fulfils the conditions (a) and (b) above but has not sought work during the 30 days before enumeration because he/she believed that work was not available, he/she is still classified as unemployed, being regarded as a so-called "discouraged worker".

Notwithstanding the above, the following types of persons are also classified as unemployed :

  1. persons without a job, have sought work but have not been available for work because of temporary sickness; and
  2. persons without a job, have been available for work but have not sought work because they :
    1. have made arrangements to take up a new job or to start business on a subsequent date; or
    2. were expecting to return to their original jobs.

The unemployment rate refers to the proportion of unemployed persons in the labour force. Seasonally adjusted unemployment rates are compiled for making comparison over time. Starting from May 2008, the seasonally adjusted unemployment rate is compiled by the X-12 ARIMA method to replace the previous X-11 ARIMA method. The seasonally adjusted unemployment rates since November 2006 - January 2007 have  also  been revised  using the new method. X-12 ARIMA method is an update to the X-11 ARIMA method with enhanced modelling and diagnostic capabilities. The X-12 ARIMA method has now been a standard method used by statistical offices for performing seasonal adjustment of statistical series in many countries/territories.

The underemployed population comprises those employed persons who have involuntarily worked less than 35 hours during the 7 days before enumeration and have sought additional work during the 30 days before enumeration, or have not sought additional work but have been available for additional work during the 7 days before enumeration. Following this definition, employed persons taking no-pay leave due to slack work during the 7 days before enumeration are also classified as underemployed if they worked less than 35 hours (or even did not work at all) during the 7-day period. The underemployment rate refers to the proportion of underemployed persons in the labour force.

The labour force statistics are subject to routine revision arising from :

  1. Routine revision to population estimates --- under the "resident population" approach, all population estimates in a given year can only be finalized in August of the following year.
  2. Routine revision to seasonal factors compiled using the X-12 ARIMA method --- the series of seasonally adjusted unemployment rate in respect of all moving three-month periods in a given calendar year is subject to routine revision later, when the finalized labour force statistics for all moving three-month periods in that year are available to enable re-estimation of the final seasonal factors.

Employment

Hong Kong Standard Industrial Classification

Since March 2009, the industry breakdowns of employment statistics are based on the Hong Kong Standard Industrial Classification Version 2.0 (HSIC V2.0), which is modelled on the United Nations' International Standard Industrial Classification of All Economic Activities Revision 4 (ISIC Rev. 4), with adaptation for the industrial structure of the local economy. The series has been backcasted to the reference period of March 2000. Users may refer to the feature article entitled "Revision of the Hong Kong Standard Industrial Classification" published in the November 2008 issue of the Hong Kong Monthly Digest of Statistics for more details on the revision of HSIC.

Persons Engaged and Vacancies

Statistics on the number of establishments, persons engaged and vacancies serve as indicators of short-term changes in the local labour market. It should be noted that figures in the tables concerned are based mainly on the findings of the Quarterly Survey of Employment and Vacancies (SEV) and the Quarterly Employment Survey of Construction Sites (Site Survey), which does not cover some industries for operational difficulties.

Owing to the incomplete survey coverage in respect of some industry sections, figures for them and the total figures are not meant to represent the overall situation of these industry sections and the entire labour market respectively. This should be borne in mind when interpreting the respective figures.

For the non-construction industry sections covered by the SEV, the unit of enquiry is an establishment. An establishment is defined as an economic unit which engages, under a single ownership or control, in one or predominantly one kind of economic activity at a single physical location, e.g. an individual factory, workshop, retail shop or office. Where separate figures relating to different activities or different locations under the same management are not available, a combined return is accepted. In this case, the reporting unit is treated as an establishment. For the civil service, the unit of enquiry is a government bureau/department. For the Site Survey, the unit of enquiry is a construction site. A construction site is defined as a demarcated locality where one or more stages of construction work are being carried on.

For establishments outside the civil service, persons engaged include :

  1. individual proprietors, partners and persons having family ties with any of the proprietors or partners and working in the establishment without regular pay, who are actively engaged in the work of the establishment for at least 1 hour on the survey reference date;
  2. full-time salaried personnel/employees directly paid by the establishment and working directors of limited companies, both permanent and temporary, who are either at work (whether or not in Hong Kong) or temporarily absent from work (viz. those on sick leave, maternity leave, annual vacation or casual leave, and on strike) on the survey reference date; and
  3. part-time employees and employees on night/irregular shifts working for at least 1 hour on the survey reference date.

Civil servants refer to persons who are employed on civil service terms of appointment as at the survey reference date. Independent Commission Against Corruption officers, locally engaged staff working in the Hong Kong Economic and Trade Offices outside Hong Kong, and other government employees like Non-Civil Service Contract staff are excluded. A minor revision has been made on the statistical definition since the statistical month of June 1999, whereby judges and judicial officers in the Judiciary are excluded from the coverage of civil servants.

Manual workers at construction sites refer to skilled, semi-skilled and general workers working at those sites on the survey reference date. Manual workers are either directly employed by the main contractors, or being called upon by sub-contractors or gangers to work in the construction sites.

Vacancies refer to unfilled job openings which are immediately available, and for which active recruitment steps are being taken on the survey reference date. Civil service vacancies refer to the vacancies net of posts pending deletion and posts held by temporary staff or reserved for other staff. However, vacancies at construction sites include only those vacancies of manual workers.

Payroll and Wage

The following types of wages and earnings statistics are currently compiled from establishment statistical surveys : wage indices; indices of payroll per person engaged; salary indices; and distribution of monthly/hourly wages. The wage indices and indices of payroll per person engaged are compiled from the Labour Earnings Survey on a quarterly basis. The wage indices reflect changes in the price of labour for workers up to supervisory level while the indices of payroll per person engaged measure changes in average employment earnings of personnel at all levels. These statistics are useful for monitoring short-term changes in the labour market in respect of employers' labour costs. The salary indices are compiled from the Survey of Salaries and Employee Benefits – Managerial and Professional Employees (Excluding Top Management) on an annual basis, and reflect movements of salary rates of middle-level managerial and professional employees. Distributions of monthly and hourly wages are obtained from the Annual Earnings and Hours Survey. They are essential inputs for analyses related to Statutory Minimum Wage.

Payroll covers basic wages and salaries, bonuses and gratuities, commissions, allowances and cash payments in other forms paid directly to employees as well as other irregular payments to workers such as discretionary bonuses and overtime allowances. The nominal index of payroll per person engaged indicates the overall movement of average labour earnings. The real index of payroll per person engaged, obtained by deflating the nominal index by the Composite Consumer Price Index, indicates changes in the purchasing power of labour earnings.

Wage rate reflects the “price” of labour and refers to the amount of money paid for normal hours of work.  It includes, apart from basic wages and salaries, cost-of-living allowance, meal allowance/benefit, commission and tips, good attendance bonus, shift allowance, guaranteed year-end bonus/payment, and other guaranteed bonuses and allowances. However, pay for overtime work is excluded. The nominal wage index measures the pure changes in wage rates unaffected by changes in industrial and occupational structure between two successive reference months. The real wage index, obtained by deflating the nominal wage index by the Consumer Price Index (A), indicates changes in the purchasing power of the amount of wages earned.

Salary rate is defined to include monthly basic salary, cost-of-living allowance, guaranteed year-end bonus/payment, commission and other regular and guaranteed bonuses and allowances.  The Nominal Salary Index (A) measures the overall changes in average salary rates of middle-level managerial and professional employees.  The Nominal Salary Index (B) measures changes in average salary rates of those middle-level managerial and professional employees who have been in the same occupation and in the same company in 2 consecutive years.  It therefore only accounts for salary changes brought about by general increment, meritorious increase and gain in seniority.  The Real Salary Index (A) and the Real Salary Index (B) are derived by deflating the respective nominal indices by the Consumer Price Index (C) and measure changes in the purchasing power of the amount of salaries earned.

Hourly wage and monthly wage distributions compiled from the Annual Earnings and Hours Survey follow the definition of wages as adopted in the Employment Ordinance. In brief, the following components are covered : (i) basic wage; (ii) commission and tips not of gratuitous nature; (iii) guaranteed bonuses and allowances other than end of year payment; and (iv) overtime allowance.

Statistical Classifications

Title
Release Date

Glossary of Terms

Term
Definition
Casual employee
Casual employee refers to an employee who is employed by an employer on a day-to-day basis or for a fixed period of less than 60 days at the time of enumeration.
Civil service / Civil servants
Civil servants refer to persons who are employed on civil service terms of appointment as at the survey reference date.
Construction site
Construction site refers to a demarcated locality where one or more stages of construction work are being carried on.
Displaced worker
Displaced worker refers to a person aged 17 and over who, during the 12 months before enumeration, has left a job in which he/she has worked as an employee for two years or more owing to the following reasons :
(a) company closing down; or
(b) employer moving operations to the mainland of China or other countries/territories; or
(c) post abolished; or
(d) slack work in company; or
(e) employer unilaterally varying the terms of employment contract; or
(f) employer failing/deferring to pay wages; or
(g) dismissal.
Employed persons
Employed persons refer to those persons aged 15 and over who have been at work for pay or profit during the 7 days before enumeration or have had formal job attachment. Unpaid family workers and persons who were on leave/holiday during the seven days before enumeration are included.
Employment / Persons engaged
Figures on employment / persons engaged include : (i) individual proprietors, partners and persons having family ties with any of the proprietors or partners and working in the establishment without regular pay, who are actively engaged in the work of the establishment for at least 1 hour on the survey reference date; (ii) full-time salaried personnel/employees directly paid by the establishment and working directors of limited companies, both permanent and temporary, who are either at work (whether or not in Hong Kong) or temporarily absent from work (viz. those on sick leave, maternity leave, annual vacation or casual leave, and on strike) on the survey reference date; and (iii) part-time employees and employees on night/irregular shifts working for at least 1 hour on the survey reference date.
Entrant into labour force
Entrant into the labour force refers to a person who is economically active at the time of enumeration and was in Hong Kong but economically inactive a year ago.
Establishment
Establishment is defined as an economic unit which engages, under a single ownership or control, in one or predominantly one kind of economic activity at a single physical location, e.g. an individual factory, workshop, retail shop or office.
Hong Kong Standard Industrial Classification (HSIC)
Hong Kong Standard Industrial Classification (HSIC) is a statistical classification framework for classifying economic units into industry classes based on their major activities.
Hourly wage
Hourly wage is derived by dividing (i) the amount of wages paid to an employee in the wage period related to hours worked, i.e. wages paid after deducting payments related to rest days and meal breaks which are not regarded as working hours by (ii) number of working hours in the same wage period, which is the sum of the contractual/agreed working hours (including meal breaks which are regarded as working hours according to the employment contract or agreement with the employer) and overtime hours worked at the direction of employers.
Hours of work
Hours of work refer to the number of hours which an employed person actually worked in all employment during the 7 days before enumeration. All paid and unpaid hours worked at the place of work are included, but meal breaks are excluded.
Industry
An industry refers to the set of all business units engaged primarily in the same or similar kinds of economic activity. The industry classification follows the Hong Kong Standard Industrial Classification Version 2.0 (HSIC V2.0), which is modelled on the United Nations’ International Standard Industrial Classification (Revision 4) (ISIC Rev. 4), with adaptation for the industrial structure of the local economy.
Job-changer
Job-changer refers to a person aged 15 and over who is employed at the time of enumeration and has changed jobs in Hong Kong during the 12 months before enumeration.
Labour force
Labour force refers to the land-based non-institutional population aged 15 and over who satisfy the criteria for being classified as employed persons or unemployed persons.
Labour force participation rate (LFPR)
Labour force participation rate refers to the proportion of labour force in the total land-based non-institutional population aged 15 and over.
Leaver from labour force
Leaver from the labour force refers to a person aged 15 and over who is economically inactive at the time of enumeration and was in Hong Kong but economically active a year ago.
Manual workers at construction sites
Manual workers at construction sites refer to skilled, semi-skilled and general workers working at those sites on the survey reference date.
Median hourly wage
By arranging the hourly wages of all employees from the smallest to the largest value, the median hourly wage is the hourly wage of the employee who ranks in the middle of all the employees concerned. In other words, the median hourly wage is the hourly wage value that delineates the lowest 50% of all the employees concerned.
Monthly employment earnings
Monthly employment earnings refer to earnings from all jobs during the month before enumeration. For employees, earnings include wage and salary, bonus, commission, housing allowance, overtime allowance and attendance allowance. However, back pays are excluded. For employers and self-employed, earnings refer to amounts drawn from the self-owned enterprise for personal and household use. If information on the amounts drawn for personal and household use is not available, data on net earnings from business would be collected instead.
Monthly household income
Monthly household income refers to the total cash income (including earnings from all jobs and other cash incomes) received in the month before enumeration by all members of the household.
Nominal Index of Payroll per Person Engaged
The Nominal Index of Payroll per Person Engaged can generally be used to indicate changes in average earnings of employees provided that the employment structure remains relatively stable over time.
Nominal Salary Index (A)
The Nominal Salary Index (A) measures the overall changes in average salary rates of middle-level managerial and professional employees.
Nominal Salary Index (B)
The Nominal Salary Index (B) measures changes in average salary rates of those middle-level managerial and professional employees who have been in the same occupation and in the same company in 2 consecutive years. It therefore only accounts for salary changes brought about by general increment, meritorious increase and gain in seniority.
Nominal Wage Index
The Nominal Wage Index measures the pure changes in wage rates of employees up to supervisory level (that is, managerial and professional employees are not included) by holding constant the structure of the labour force with respect to industry, occupation and sex between two successive rounds of the survey.
Occupation
Occupation refers to the kind of work, nature of duties and main task performed by a person in his/her main job. The classification used basically follows the major groups of the International Standard Classification of Occupations (2008), or ISCO 08 for abbreviation, with local adaptation for Hong Kong.
Owner-occupiers
Owner-occupiers refers to households which own the quarters they occupy.
Part-time employee
Part-time employee refers to an employee with his/her main employment at the time of enumeration fulfilling the following criteria :
(a) the number of usual days of work per week is less than 5 (for a person with a fixed number of working days per week); or
(b) the number of usual hours of work per working day is less than 6 (for a person with a fixed number of working days per week); or
(c) the number of usual hours of work per week is less than 30 (for a person without a fixed number of working days per week).
However, a person who usually works 24 hours per shift is excluded, regardless of the number of usual days of work per week.
Payroll
Payroll includes elements covered by wage rate (see relevant definition) as well as other irregular payments to workers such as non-guaranteed or discretionary cash bonuses and allowances (e.g. profit-sharing bonuses and long service bonuses), overtime payment and back-pay. Employers' contribution in respect of their employees paid to social security and pension schemes, and benefits received by employees under these schemes are excluded. Profits earned by proprietors and business partners, payments in kind (e.g. quarters provided by company), severance payments, termination payments and long service payments, pensions and payment to outworkers are also excluded.
Payroll per Person Engaged
Payroll per Person Engaged is derived by dividing the total payroll of the reference period by the total number of persons engaged as at the survey reference date.
Percentile hourly wage
Percentile hourly wage figures are useful in discerning the distribution of hourly wage of employees. The pth percentile hourly wage is the hourly wage value which delineates the lowest p% of all the employees concerned, where p can be any integer value from 1 to 99. For instance, the 10th percentile hourly wage is the hourly wage value that delineates the lowest 10% of the employees. The 25th percentile, 50th percentile and 75th percentile hourly wages are also known as the lower quartile, median and upper quartile hourly wages respectively.
Real Index of Payroll per Person Engaged
The Real Index of Payroll per Person Engaged, obtained by deflating the nominal index by the Composite Consumer Price Index, indicates changes in the purchasing power of labour earnings.
Real Salary Index (A)
The Real Salary Index (A) is derived by deflating the corresponding nominal index by the Consumer Price Index (C) and measure changes in the purchasing power of the amount of salaries earned.
Real Salary Index (B)
The Real Salary Index (B) is derived by deflating the corresponding nominal index by the Consumer Price Index (C) and measure changes in the purchasing power of the amount of salaries earned.
Real Wage Index
The Real Wage Index, obtained by deflating the Nominal Wage Index by the Consumer Price Index (A), indicates changes in the purchasing power of the amount of wages earned.
Salary Indices
Salary indices are compiled to measure changes in salary rates of middle-level managerial and professional employees in both nominal and real terms.
Salary rate
Salary rate is defined to include monthly basic salary, cost-of-living allowance, guaranteed year-end bonus/payment, commission and other regular and guaranteed bonuses and allowances. The remuneration for managerial employees and professionals is usually coined as salary instead of wage though they have more or less the same components.
Underemployed persons
Underemployed persons refer to those employed persons who have involuntarily worked less than 35 hours during the 7 days before enumeration and either
(a) sought additional work during the 30 days before enumeration; or
(b) have been available for additional work during the 7 days before enumeration.
Following this definition, employed persons taking no-pay leave due to slack work during the 7 days before enumeration are also classified as underemployed if they worked less than 35 hours or were on leave even for the whole period during the 7-day period.
Underemployment rate
Underemployment rate refers to the proportion of underemployed persons in the labour force.
Unemployed persons
Unemployed persons refer to those persons aged 15 and over who fulfil the following conditions :
(a) Have not had a job and have not performed any work for pay or profit during the 7 days before enumeration;
(b) Have been available for work during the 7 days before enumeration; and
(c) Have sought work during the 30 days before enumeration.
However, if a person aged 15 or over fulfils the conditions (a) and (b) above but has not sought work during the 30 days before enumeration because he/she believes that work is not available, he/she is still classified as unemployed, being regarded as a so-called "discouraged worker".
Notwithstanding the above, the following types of persons are also classified as unemployed :
(a) persons without a job, have sought work but have not been available for work because of temporary sickness; and
(b) persons without a job, have been available for work but have not sought work because they :
(i) have made arrangements to take up a new job or to start business on a subsequent date; or
(ii) were expecting to return to their original jobs.
Unemployment rate
Unemployment rate refers to the proportion of unemployed persons in the labour force.
Vacancies
Vacancies refer to unfilled job openings which are immediately available, and for which active recruitment steps are being taken on the survey reference date. However, vacancies at construction sites include only those vacancies of manual workers.
Wage rate
Wage rate reflects the “price” of labour. It refers to the amount of money paid for normal hours of work and thus usually relates to a time unit such as an hour, a day, a week or a month. It includes, apart from basic wages and salaries, cost-of-living allowance, meal allowance/benefit, commission and tips, good attendance bonus, shift allowance, guaranteed year-end bonus/payment, and other guaranteed bonuses and allowances. However, pay for overtime work is excluded.