My Take | The vicious cycle after colonial rule

Why do many people think Hong Kong is so screwed up now and that we were happier and better off under the Brits?

There is a simple common-sense explanation which leaves aside questions about colonialism and democracy.

During the last three decades of British rule, Hong Kong enjoyed a virtuous socio-economic cycle that led to high earnings growth and expansion of education and job opportunities for the average person. After the handover, this virtuous cycle was broken. It became much less virtuous even for the better off, and positively vicious for youth, low-income and disadvantaged groups.

From the mid-1970s until the handover, the average worker earned 139 per cent more while the economy expanded by an average of 6.6 per cent a year, according to census data. But from 1997 to 2013, his or her salary grew by just 14 per cent and the annual GDP rose by 3.5 per cent.

However, this disguised the fact that earnings were stagnant for one in two workers, primarily for those in low-paid jobs.

In the 1980s and 1990s, median monthly household income grew at rates that closely tracked those of flat prices. But in the last decade, they have diverged drastically. A new Legco research paper finds household income expanded by just 30 per cent while small flat prices jumped 188 per cent.