Catching the hot potato

PUBLISHED : Thursday, 23 February, 2012, 12:00am
UPDATED : Thursday, 23 February, 2012, 12:00am


The issues

Hong Kong remains the world's freest economy, according to the Index of Economic Freedom. However, it is worth considering exactly what this means for its citizens.

How life got tougher

Joan Lee Tsui-king of The Link Watch, an advocacy group, gives a historical look at today's underprivileged.

She said that in recent years, the average Hongkonger has faced rising living expenses, with fewer job opportunities. But it wasn't like that in the 1970s and '80s.

'Many locals lived in public housing and worked at nearby factories in newly developed areas such as Tsuen Wan and Sha Tin,' Lee said. 'They created a self-sufficient economy within a community. They worked in factories and opened up little shops to support their families.

'They did not lead luxurious lives, but they were able to support themselves.'

Later, the city's economy shifted to service-oriented industries. This meant fewer jobs in the suburbs and people needed to travel to city centres to work.

Some got cleaning jobs, others became security guards.

Travelling expenses became an extra burden to families already on tight budgets. Plus, people started to spend more time commuting and less time taking care of children.

'These families could not afford babysitters, and they struggled to choose between work and childcare. As a result, the self-sufficient economy was shattered. Less time was spent in the community, and little family businesses had to close down,' said Lee.

As the economy continued to develop, brand-name stores replaced small businesses. 'A luxury shopping mall may appear to upgrade a community, but the reality is, the average person can never afford to shop there,' said Lee.

With big chain stores serving housing estates and even remote areas such as Tin Shui Wai, the poor have few options to shop. 'People can no longer buy cheap stuff; all that is left are products from big brand names and chain stores,' she said.

The awful truth behind the boom

Hong Kong's high living standards have only made the poor even poorer, said Dr Paul Yip, founding director of the Centre for Suicide Research and Prevention.

News headlines like to play up the city's growth in the past decade: we saw a 40 per cent growth in gross domestic product per capita, or per person, which is about US$32,000 per year.

But, below the surface, there's a different story. About 30 per cent of people earning the least are actually making less money than they did a decade ago. And 10 per cent of workers earn less than US$10,000 a year.

Last year, a minimum wage law - set at HK$28 per hour - was enforced, but the rate is still low in view of rising living costs in Hong Kong.

Those aged between 15 and 29 are more likely to face unemployment than any other group, and people in their 20s are seeing rising jobless rates for the first time since 1991, regardless of educational background.

With rising rents, fewer job prospects and more job-hunters on the market, many youths feel trapped.

Some of these youths live in towns that were developed in the 1970s to accommodate a swelling population.

Residents of areas such as Tung Chung and Tuen Mun feel isolated from urban areas and have higher populations of low-income groups. They may be less educated and face financial difficulties, which could lead to mental health problems or domestic violence.

The success of a city cannot be measured by its financial prowess alone; the well-being of its residents is also important.

Even with outstanding economic achievements and world-class infrastructure, a city is only as strong as its weakest link.

The news

When the new chief executive takes the helm in July, the hot-potato issues will include the challenges posed by an ageing population, poverty and family problems.

About one in three elderly people are struggling with poverty, a record high since 1995. That's about 290,000 people 65 or above, according to the Council of Social Service. The council defines poverty as earning less than half the city's median household income - about HK$3,450 a month for a single person.

The two leading candidates, Leung Chun-ying and Henry Tang Ying-yen, have their own thoughts on how to tackle poverty.

Leung, the former convenor of the Executive Council, suggested adjusting the existing old-age allowance system. Apart from the non-means-tested monthly HK$1,035 allowance, he proposed increasing the payout for those in dire financial need if their assets fall below a certain level.

Tang, the former chief secretary who chaired the Commission on Poverty from 2005 to 2007 and the Community Care Fund, said the government should consider health care, places in homes for the elderly and retirement protection.

On the Mandatory Provident Fund scheme, Tang admitted that the returns were not enough to support a dignified post-retirement life.

He proposed that, on top of their existing MPF accounts, employees set up voluntary MPF accounts managed by the Monetary Authority without extra management fee charges. This could give the elderly a better retirement life.

When asked about ways to tackle poverty, every politician seems to have loads of answers. But here's the question that needs to be answered: why are so many Hongkongers still living below the poverty line?

This is an edited version of a story by Colleen Lee, published in the South China Morning Post on January 10

Facts and figures on Hong Kong's wealth distribution

Hong Kong is one of the richest places on Earth. About 86,000 millionaires and 484 billionaires live in the city, according to a report by banking group Julius Baer in August. In Asia, 6 per cent of high net-worth individuals (those with more than US$1 million to invest) are from Hong Kong.

Should be we proud of those numbers or they are simply glaring evidence of inequalities? Here are some figures that explain why life is beautiful for only a handful of privileged people.

High Gini coefficient

The city's Gini coefficient, which measures wealth inequality, was 0.518 in 1996. Zero is complete equality and one is complete inequality, so the higher the number, the worse it is. Gini grew to 0.525 in 2001, and 0.533 in 2007.

Increasing income disparity

The median household income of the top 10 per cent of the population in 2010 was HK$77,000 a month, up HK$7,000 from 2006, according to the Census and Statistics Department.

Over the same four years, the poorest 10 per cent of families became even poorer. They lived on HK$3,000 a month in 2010, HK$100 less than in 2006. In 2010, 1.26 million earned less than HK$3,500 a month.

Voices: What people are saying

'For the last 50 years or more, Hong Kong people have been remarkably tolerant of the wide divergences in wealth. We have among the world's highest Gini coefficients [among developed nations] - a measure of income inequality - but we have fortunately been largely free of the politics of envy. Up to now.'

Mike Rowse, search director at Stanton Chase International and an adjunct professor at Chinese University

'Whoever becomes the next chief executive, he should be able to outdo [incumbent Donald Tsang Yam-kuen], who hardly cares about the grass roots at all.'

Nelson Chow Wing-sun, chair professor at the University of Hong Kong's Department of Social Work and Social Administration

'I eat only breakfast and lunch, not dinner, about four times a week. I want to have dinner. I feel happier if I can have it. My parents are ill and cannot work, and the family's income is only monthly welfare of HK$7,500.'

Cheng Yim-ting, 12, younger daughter of a family of four living in Fu Cheong Estate in Sham Shui Po