Hong Kong needs to diversify economy and capitalise on technology trend to help young people, study says
Researchers say the city is too reliant on real estate and finance and this has contributed to downward social mobility among young people
More young Hongkongers are grappling with downward social mobility, taking lower-paid jobs and finding themselves unable to afford a home as property prices soar but their earnings growth slows, a Legislative Council study has found.
Researchers believe that a narrow economy, which has been relying mainly on the real estate and finance sectors for the past three decades, has led to "restrained earnings growth and social mobility".
They propose that the government capitalise on the current global trend of technology and innovation and restructure the city's economy by developing creative industries and investing more in vocational training and research and development.
The study, which was released yesterday, found that 34 per cent of employed young people aged between 15 and 24 had taken lower paid service and sales jobs in 2011, compared with 21 per cent in 1991.
"Today's young generation have been raised in a better environment and are better educated," the researchers said in the report. "They have heightened expectations for career and life."
The median monthly earnings of service and sales workers was HK$9,880 in 2013.
At the same time, Hong Kong workers' earnings have also been growing more slowly, with the median monthly employment earnings of the overall workforce increasing by 14 per cent from 1997 to 2013, compared with a whopping 139 per cent between 1976 and 1996.
Researchers said the rapid growth of the past was thanks in part to the city cashing in on its "distinct role" as a gateway to the mainland, through which it transformed itself into a service economy, while manufacturing operations relocated across the border.
They said the current slowdown had been caused by the city's inability to create new "growth engines" when the increasing integration of the mainland with the world economy had caused Hong Kong's role as intermediary to wane.
Furthermore, young people will find it increasingly difficult to afford their own home, as the study found that the average price for a small residential flat surged by 188 per cent from 2006 to 2013, while the median monthly household income only increased by 30 per cent over the same period.
From 1981 to 2006, household income growth and housing prices closely matched each other, the researchers added.
They also cited a University of Hong Kong study, commissioned by the government, which found that 54 per cent of workers in the lowest income bracket were unable to attain any upward social mobility, even after 10 years of work.
The researchers said this could affect people's perception of equality and fairness, which would make them doubtful about social justice and frustrated over governance.