What tiny Luxembourg can teach ageing Hong Kong about labour mobility in the Greater Bay Area

Lucy Kwan and Rex Wong Yat Chun say Luxembourg can be a model for Hong Kong as it tackles a static demographic and labour structure. Hong Kong must take advantage of its closeness to the Pearl River Delta by embracing openness through the flow of ‘frontier workers’

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Construction workers at the West Kowloon Cultural District in July last year. The Hong Kong education system tends to undersupply blue-collar workers. Photo: Felix Wong

Published: 5:21pm, 26 Dec 2017Updated: 7:24pm, 26 Dec 2017

Hong Kong is faced with a labour mismatch problem. Industries such as construction and catering complain of chronic worker shortages, while Hong Kong’s youngsters are encouraged to choose a “decent” career in our pillar industries. Our education system, therefore, oversupplies white-collar workers but undersupplies blue-collar workers, who are seen to have less bright socio-economic prospects. As a result, our talent pool is imbalanced and cannot react according to the actual needs of industries.

Many developed cities in the world can draw their talent pool from surrounding areas. However, Hong Kong is special. Currently, there seems to be a lack of concerted and proactive efforts to increase labour mobility in both directions. Hong Kong should form a conurbation with neighbouring cities so that citizens within the economic circle can freely move from their residence to their workplace.

The completion of the Hong Kong-Zhuhai-Macau bridge and the high-speed railway may realise such a vision. Luxembourg gives us a template.

Despite limited space and population, Luxembourg is one of the world’s most influential financial centres. On aggregate income per capita, Luxembourg ranks among the top economies in the OECD group of wealthy nations. Such economic miracles would not have been achieved if only locals were involved. In fact, nearly half of its population of just 500,000 are foreigners. Moreover, nearly half of the total national employments (more than 170,000 workers) involve “frontier workers”, that is, they reside in neighbouring countries and commute to work, usually daily.

Watch: Luxembourg: Small country, big numbers (2012)

The Luxembourg government has made huge efforts to facilitate cross-border employment. For example, frontier workers can come and go without any restriction if they are European Union or European Free Trade Association nationals. If they are third-country nationals, they must hold a valid work permit issued by certain countries, as well as a valid Luxembourg employment contract bearing a clear statement from their Luxembourg employer that they work for a specific number of days of the month.