• Sat
  • Dec 20, 2014
  • Updated: 8:14pm
Jake's View
PUBLISHED : Thursday, 22 May, 2014, 1:15am
UPDATED : Thursday, 22 May, 2014, 1:15am

Jobs cry an excuse to continue income disparity

HK needs to rise to the level of the great democracies if everyone is to have a better life

Government sees 188,000 jobs with no one to fill them by 2022, and a big educational mismatch.

SCMP headline, May 20

I don't want to seem culturally elitist about these things but there is a reason that much of the world looks up to the great democracies of the West.

Superficially, of course, it is because they are rich. In fact, this is more a result than a cause. The real reason is that their people participate so widely in all their scientific and cultural achievements. This gives them both their wealth and their standing.

And the reason that their people participate so widely is that they have the time and energy to do it after the daily grind of just staying alive and hiding from the exactions of the more powerful.

The great democracies generally have better income equality. The rewards of it are immense.

We can also rise to this level in Hong Kong but let's not fool ourselves. We are not there yet. It would require significantly greater increases in take-home pay at the bottom of the income scale for a prolonged period.

All the studies, however, suggest that income disparity is still wide in this town and has grown.

Your own eyes can tell you so, too. Ask yourself, how many times have you seen a self-serve petrol station in Hong Kong? How many times have you seen a full-service one in the United States? Every day here presents evidence of people employed in jobs of marginal utility. They come cheap.

And now our government is readying itself to ensure that they stay cheap. That is what "shortfall of workers" means in reality. It means government giving in to the demands of employers that the borders be opened to allow in a flood of migrant labour so that kitchen help can be kept at minimum wage.

I admit that the alternative can be a wrenching experience. When dish washers are not available at less than HK$15,000 a month, the cost of eating out goes up and you may find yourself doing less of it.

If you own a car, you may even find yourself having to step out of it at the petrol station to fill your own tank. The pump jockey has found himself a job in car repair and full service can no longer compete with self-serve in the price of fuel.

That is how it went in Europe and the US and that is how they raised themselves to the state of development they have reached.

This opportunity has now been presented to us. As the first chart shows, there is a close inverse correlation between unemployment and wage growth in Hong Kong. Joblessness is near record lows. Low-end wages are catching up.

And as to that bit about "a big educational mismatch", I present the evidence of the second chart. University degree holders account for 27 per cent of the workforce, more than double the figure 15 years ago.

Mismatch indeed. And there certainly will be if these people are not allowed to carry this society's standards of work and pay upwards.

jake.vanderkamp@scmp.com

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This article is now closed to comments

rpasea
There are too many vested interests keeping wages low including govt. Where will all those bureaucrats find jobs if we did not have subsidized housing, subsidized healthcare, transport allowances and regular cash handouts? All are govt. programs intended to subsidize employers so employers can continue to pay slave wages at the low end. Who reading this could survive on $30/hour? The minimum wage should be at least double that.
.
Regarding a labor shortage, some of those bureaucrats could go to get real jobs in the private sector.
ABCDEFG
Errr....Jake,... what is the jobless rate in Europe again? And how has the participation in the labour market changed again in the US? And how much unsustainable debt have western economies built up again to support the welfare states and minimum wages and resulting 'standing'? This town aint so bad.......
SpeakFreely
Hk as a so called developed place has too many low wage n low skill jobs. Unemployment rate is low partly because of this artificial existent of these low skill job such as gas station attendants, security guard, restaurant helpers (super old and low skill type), these categories of jobs are all eliminated in the US where technology already replaced them or because of deployment of technology reducing these low skill jobs by say 50 to 80%. If you add back these group of people, probably around 200k, our real unemployment rate is probably around 7 to 10% vs US 6.4% now.
virokick
Can't believe my eyes! The great conservative ,free market , low taxes, non- government intervention , Pikketty bashing- JVDK talking about income inequality ??
This cannot be done without proper redistributive measures in HK; which includes more progressive redistribution , social safety nets , keeping quality education and training accessible to the masses, providing upward mobility.
HK's economy is not diverse enough like America or Europe, hence an interventionist/ redistributive approach is necessary to help those at the bottom.
Raising the wages is one thing, but can it match inflation , ie property price inflation is another.
With policies that JVDK supports - petrol attendants and dishwashers will always be the working poor.
Don't try to mix rising wages, technology, skill with inequality , quality of life and democracy JVDK.
If you really mean it and not a hypocrite -:to prove you are not culturally elitist than why not promote some of your high taxes and redistributive measures so well known in the West here in HK.
gunzy
maybe you should check on the unemployment rate of some of the cities in the States before you use the low US unemployment rate so freely.
.
****www.bls.gov/web/metro/laulrgma.htm
.
And I disagree with your statement that these categories have been eliminated; people there just don't want to do it as they feel it is beneath them resulting in the need for self-serve gas stations. Plenty of jobs in fast food restaurants that are just as low skilled, which in most metropolitan cities probably account for a great number of low skilled workers.
SpeakFreely
Imagine what will new the unemployment rate of hk if today our min wage is HKD 75 per hour? That's the rate in most of the US cities. Hk government and biz people are not investing in tech therefore we have to keep our min wage real low other we won't be able to be competitive. But developed countries like US they deployed tons of tech. Example, any major stores such as Walmart, Home Depot etc if you goto their website to search for an item, it will tell you whether the item is n stock in the store close to you and even precisely tell you which row is the item in. And when you check out, you have an option to print the receipt and send it to your email when you use your credit card. If you need to return any goods, even without receipt, they can just run your credit card and find the item your had purchased. In online banking, they have cheque deposit via smartone over one year. That's there are very few bank branches and no one got branches. Majority of people use online banking. This is how tech increase efficiency. If you compare hk Fortress or Watson websites to US website they are so much behind and if they are in US, they will be gone bankrupt as not competitive.
gunzy
Try giving some of those cashiers cash and have them count out the change for you and you'll understand why most people prefer to pay by credit card.
.
And how much of the HKD 75 per hour is after tax?
virokick
Wages are low in HK by world standards, and even lower by HK's own standard in PPP terms.
Contrast nominal wage growth with growth in property prices, than tell me if workers in HK are actually having a fair deal or are slaves ?
SpeakFreely
Typo I meant smartphone cheque deposit....
impala
Am I dreaming?

Is this Mr van der Kamp coming out in favour of redistributive policies and the enormous labour market distortion that is the non-free movement of people across borders?

Well, for once we completely agree then.

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