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Outside In | For a truly ‘Happy Hong Kong’, John Lee must address rapidly growing inequality
- This is a city with a growing earnings gap, with most despairing of an affordable retirement while the super-rich elite ignore property rules to get even richer
- If John Lee is serious about creating a ‘Happy Hong Kong’, he cannot afford to ignore this issue
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Four years ago, Hong Kong’s former colonial secretary David Akers-Jones died at 92. In the days before his death, then chief executive Carrie Lam Cheng Yuet-ngor visited him. It is said that his parting advice to her was: help the poor and build more housing.
Despite her tearful and reverential eulogy, recent news and events – an Oxfam report on poverty, an HSBC survey on retirement savings, and a report from the Liber Research Community NGO about the property shenanigans of our super-rich – suggest that Lam made little of his advice, and that Chief Executive John Lee Ka-chiu and his team seem to be doing no better.
Oxfam’s report shows the gap between Hong Kong’s richest and poorest households widening stratospherically since 2019. On average, the richest 10 per cent earned HK$132,600 (US$16,950) a month at the end of the first quarter of this year, while the poorest earned HK$2,300 – 57.7 times less. At the end of 2019, they earned 34 times less.
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With 129,500 Hong-Kong-dollar millionaires and 32 billionaires, the city is one of the most unequal places on the planet. Oxfam estimates that 1.3 million people in Hong Kong live in poverty, mostly aged over 65, and that about 220,000 live in our notorious “cage homes” or subdivided units.
The HSBC survey of the savings needed for a secure retirement provides a surreal counterpoint. It found that a Hongkonger needed savings of US$1.1 million to be confident of a financially secure retirement.
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This raised some troubling thoughts. First, the 4.7 million members of the Mandatory Provident Fund have, on average, a savings balance of just HK$236,800 each, (US$30,270) – an unbreachable shortfall. Second, if you earn the median monthly income of HK$29,500 and manage to somehow save half of it, you would still need to work for 600 years to accumulate the ideal retirement savings. There is a phrase for that kind of prospect: magical thinking.
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