Hong Kong labor market faces AI displacement and low real wage growth

Hong Kong is experiencing a shifting labor landscape characterized by a narrowing overall manpower shortage and evolving salary trends. The Labour and Welfare Bureau projects a worker shortage of approximately 130,000 by 2028, a decrease from previous forecasts of 180,000, attributed to talent admission schemes and AI adoption.

However, AI is significantly impacting specific sectors. While skilled technical, healthcare, and aviation roles remain in high demand, clerical support roles are projected to face a surplus of 25,000 to 30,000 by 2028 due to automation. This shift particularly affects fresh graduates, with suitable vacancies falling by 60% since 2022, and middle-aged clerical workers without post-secondary education.

Regarding compensation, a recent survey by the Hong Kong Institute of Human Resource Management shows that average salary increases in Hong Kong and Macau both stood at 2.8%. While this is a slight increase from last year, the real wage growth in Hong Kong—after adjusting for inflation—is only 1.1%, marking a historic low. In contrast, cities within the Greater Bay Area saw an average increase of 4.2%, led by Shenzhen at 4.4%.