Hong Kong's new poverty line wins wary support

In a city better known for conspicuous wealth, a new economic indicator will seek to determine just how many Hongkongers instead live in poverty

PUBLISHED : Tuesday, 11 December, 2012, 12:00am
UPDATED : Tuesday, 22 January, 2013, 1:43pm

After years of pleading and advocacy from grass-roots voices, Hong Kong is about to have its first official poverty line, decided by a panel of experts at the newly re-established Commission on Poverty, and accepted by the government.

The move recognises that poverty is an issue: the soaring property prices, rising inflation, the narrow range of jobs available and the increasing impossibility of climbing up the social ladder have made Hong Kong a tougher and colder concrete jungle for its poorest citizens.

The launch of an official poverty line, expected to be set at half of the median household income, has been met with approval and even hurrahs from those in the social work and welfare sectors, who see it as an important step on the road to tackle the city's growing number of poor families.

But it would be a mistake to think the poverty line is the ultimate measure of poverty. Experts stress that it should only be the first step towards more poverty-oriented research, better planning on social spending and long-term welfare measures.

Nelson Chow Wing-sun, a professor at the University of Hong Kong and an expert in social security, welfare and poverty, said: "To think that having a poverty line is going to define everything and tell us everything about the poor is wrong. A poverty line actually doesn't measure poverty. It only tells us about income disparity."

However, measuring income disparity does reveal who the poor are: the demographics of the problem, Chow said.

In the past seven years, poverty had intensified, Chow said. Today, even without an official poverty line, there are groups already identified as poor, with their numbers growing. Besides elderly people and the working poor experiencing worsening conditions, the younger generation is also sliding into poverty, because of narrow job opportunities and soaring rents in the city, he said. The problem of poverty was too big to be handled by a "magic" solution, just as the problem itself was impossible to define by just one measurement.

As the Commission on Poverty is gearing up to bring in fresh measures to curb the city's growing poverty numbers - one in every six Hongkongers survives on HK$3,600 or less a month, according to Oxfam Hong Kong's report last month - Chow said dealing with poverty in Hong Kong would be a long and gruelling process.

"There is no one-stop answer to poverty. The matter has become deep-rooted and complicated," he said.

Chow, who has carried out research for the government on welfare and poverty issues under the auspices of the official think tank, the Central Policy Unit, said problems had deepened in the past seven to 10 years.

Under former Chief Executive Donald Tsang Yam-kuen, social policies remained stagnant, as problems for the lower-working class worsened, Chow said.

Even without an official poverty line, certain groups in society have already been identified as poor, or at high risk of falling into poverty. Among them is Hong Kong's elderly population, many of whom have little money saved. They did not benefit from the Mandatory Provident Fund, the compulsory retirement saving scheme, as it was set up only in the past decade, and they are reluctant to turn to welfare.

Stephen Fisher, director general of Oxfam Hong Kong and a member of the commission, said: "In Hong Kong, one of the main causes of poverty is being old. This should not be happening." Fisher, who was the director of the government's Social Welfare Department from 2007 to 2009, is calling for the creation of a pension scheme to tackle the problem.

Fisher said another struggling group was the "working poor" - people who work full-time but whose earnings cannot sustain their families' living expenses. He proposes an allowance for families on low-incomes, where the government could supplement these families, especially those with children or dependent elderly relatives, without needing to push them into the welfare net.

"These are not new ideas, but the problems are growing and need to be tackled," Fisher said.

Most worrying is the emerging class of poor young people. Chow said the younger middle-working class is sliding back into the darkness of poverty, as the economy has developed in a lopsided manner, with strong emphasis on the property development and financial sectors, while other areas were ignored, which left young people with limited choice in making a decent living.

"Tsang created a whole class of new poor: the young," Chow said. "The middle class is sliding back into poverty, and we now have a new generation that is on the margin of poverty."

A third of the 3.7 million workforce earn monthly incomes of between HK$10,000 and HK$20,000, and six out of 10 of those on low incomes are under 35 years old, Chow said. For many, even after 10 years of working, their monthly salaries are still less than HK$20,000 a month. The low salaries persist even though six out of 10 Hongkongers under 35 have gone through post-secondary education. "Imagine parents working hard to put a child through university in the hope of a better future. In the end, the child earns [less than HK$20,000]," Chow said. "Job diversity is so narrow in Hong Kong. No wonder young people have become frustrated and angry. They feel stuck. There is no social mobility, no hope."

Professor Joe Leung Cho-bun, a colleague of Chow at HKU, said: "We already pour a lot of resources on the elderly. In fact, I would argue that more resources need to be given to help our young, because they are our future."

Leung said the emergence of the working poor, many of them young and educated, was a bad trend: "There needs to be more proactive measures deployed to keep poverty from being passed on to the next generation."

Education needs to be further improved, as well as expanding the job market, so graduates can have a fair chance of carving out a decent living, Leung said.

"The 'ageing population dilemma' has crowded the government's minds, and we've forgotten that apart from caring for the retiring baby boomer generation, we need to help the next generation," he said. Hong Kong's lack of industries and employment outside of development and finance-related fields are stifling the future of the city, he warned. The government need to help "make work pay", Leung said, so that a full-time job would actually cover rent and daily expenses and sustain a family.

Soaring property prices are therefore also a huge issue, and at the root of poverty, he said.

"Eliminating poverty is a long battle. And frankly speaking I have no answers," Chow said.

Fisher, however, is more hopeful: "It's about equity, not equality," he said. "What we can do in a free market economy like ours is for the government to help make the playing field more equal with its resources, which means providing those who need more help with what they need."