How Hong Kong can gain by focusing on jobs and healthy living for both young and old

Paul Yip says although the wealth gap in Hong Kong is high, there are signs of improvement, and better employment opportunities and pay, rather than cash handouts, will ensure sustainable development

PUBLISHED : Sunday, 18 June, 2017, 3:00pm
UPDATED : Sunday, 18 June, 2017, 5:34pm

Hong Kong’s high Gini coefficient, measuring wealth disparity, is largely a result of a marked increase in the proportion of older adults and single- or two-person households. Nearly 15 per cent of the population is aged 65 and over, with life expectancy at 83 for men and 87 for women. This should be celebrated as proof of improving health care. The increase in one- or two-person households, however, relates to the rise in divorces in the past two decades, from 2,000 in 1980 to more than 23,000 last year.

Poverty rates among older adults and divorcees are much higher than the overall average. Certainly, the government must do more to reduce income disparity. Subsidies have had some effect, but it takes sizeable resources to achieve results and, to sustain this, we need to make compromises in other areas of expenditure.

Employment, salary and mobility matter most for income distribution

More importantly, employment, salary and mobility matter most for income distribution. The latest data shows the bottom 10 per cent of the low-income group has seen a 46.6 per cent increase in salary from 2011, compared with the average of 29.2 per cent. Thus, widening of income disparities among workers has at least been halted, if not reversed. This can be attributed to the introduction of the minimum wage in 2011. The proportion of poverty among working people has also been significantly reduced, to 4.6 per cent, compared with the average of 14.9 per cent. The increase in the proportion of older adults in the community need not have an adverse effect on income disparity with appropriate measures in place. Many countries are extending the retirement age and retraining middle-aged workers. Automation can improve productivity but may also cost jobs. These workers should be deployed in other areas, like health care.

Hong Kong’s next leader must strive for a fairer society by fixing the social safety net

To reduce future strains on health care expenditure, we need to promote healthy living. Carrying out a liver transplant is very expensive, for example; educating the young about the effects of excessive alcohol use would be more effective. The cost of treating cancer and heart disease is enormous; promoting a healthy working environment and more accessible leisure activities would pay off handsomely.

Incoming chief executive Carrie Lam Cheng Yuet-ngor has pledged more resources for youth. This is definitely a move in the right direction. The government should do more for those in need. However, just giving out cash won’t solve our problems; rather, it could create a culture of dependency.

To effectively improve wealth disparity, better job opportunities and remuneration can provide sustainable development for all.

Paul Yip is chair professor in the Department of Social Work and Social Administration at the University of Hong Kong