Gulf between rich and poor in Hong Kong widened during coronavirus crisis, charity report finds
- Top income households now earn about 47 times more a month than the poorest, up from 34.3 times in 2019
- Median monthly household income of richest goes up 6.3 per cent on pre-coronavirus levels, but falls by 22.9 per cent for lowest earners
The gulf between rich and poor in Hong Kong has widened during the coronavirus pandemic, with the top bracket of households earning about 47 times more than those at the bottom of the pile, an anti-poverty group has said.
Charity Oxfam Hong Kong, which analysed government statistics from 2019 to the first quarter of this year, warned on Wednesday the situation had reached “a tipping point” and appealed for government action to tackle the problem.
The charity found that the median monthly income for the city’s bottom 10 per cent of households fell by 22.9 per cent from the pre-Covid level of HK$3,500 (US$446) in 2019 to HK$2,700 between January and March this year.
But its report said that the median monthly household income of the top 10 per cent went up by 6.3 per cent from HK$120,000 to HK$127,600.
The top earners made 34.3 times more than the bottom 10 per cent in 2019, but the figure surged to 47.3 times by the first quarter.
“The gap between the rich and the poor has reached a tipping point,” Kalina Tsang Ka-wai, the director general of Oxfam Hong Kong, said. “Covid has widened the gap between the rich and the poor in Hong Kong, and the problem of unemployment and underemployment among the poor remains severe.”
Tsang said the pandemic hit poor people harder than it did the well-off, which led to a higher rate of job and income losses.
The report showed the unemployment rate among people in poverty – a monthly household income less than half of the city’s median level – reached 26.1 per cent during the first three months of 2022, compared with 3.4 per cent among the better-off.
People aged 40 or more made up more than three-fifths of the poor population who were without employment, the report revealed.
The jobless poor also faced long periods of unemployment, with about 60 per cent of them remaining jobless for at least two months, and a quarter having no job for more than half a year.
The underemployment rate among the poor reached 10 per cent in the first quarter of the year, compared with 2.7 per cent of the better-off population.
Nearly four in five of those living in poverty worked fewer than 20 hours a week, compared with about three in five in 2020.
“Those who were more lowly paid saw their income plunge during the pandemic,” said Wong Shek-hung, the director of the Hong Kong, Macau and Taiwan programme of Oxfam Hong Kong.
Wong said the income structure of the city’s labour market was a contributory factor to the problem.
She explained the city’s minimum wage had stayed at HK$37.5 an hour since 2019, but the consumer price index, especially food prices, had continued to rise, which translated to a de facto pay cut.
Terry Leung Ming-fung, the group’s assistant research and advocacy manager, said the pandemic had also forced elderly people and women who lived in poverty, but were economically active, out of jobs.
The report showed that the number of economically inactive poor people rose sharply during the pandemic, reaching 1.09 million in the first quarter of this year, up 3.2 per cent on 2020.
A total of 466,000 of them were elderly people aged 65 or more, up by about 15 per cent from 404,300 in 2020.
The charity added a severe shortage of childcare facilities had also led to continued low workforce participation by poor women. The report found almost 80 per cent of them were unable to work to support their families.
“The face of poverty in Hong Kong has been changing during the pandemic,” Leung said.
Oxfam Hong Kong made several suggestions to the government designed to help narrow the gap between rich and poor and ease the plight of the worst-off.
The organisation suggested an extension to the government’s temporary unemployment relief scheme to the end of the year, which could benefit another 120,000 people.
The group called for the minimum wage to be increased to HK$45.4 per hour, which could benefit nearly 340,000 workers, and that the level should be reviewed on an annual basis instead of every two years.
Oxfam Hong Kong said the government should regularise and increase the number of beneficiaries of its pilot scheme on living allowance for carers of elderly people from low-income families, and remove the regulation that carers cannot receive Old Age Living Allowance or support from the Comprehensive Social Security Assistance programme.
The charity suggested the government should set up independent childcare facilities to help women from low-income households go out to work.
“Poverty is one of the major issues that the new administration must address,” Tsang said. “We hope to see policies that actively assist the poor and build a stronger post-pandemic recovery in the administration’s first policy address.”
Dr Xu Duoduo, an assistant professor of sociology at the University of Hong Kong, said she was not surprised by the findings.
She explained that Covid-19 had a disproportionate effect on lower-paid workers, with most of them working in industries hit the hardest by the pandemic, including the catering and service industries.
But she said that jobs held by the top earners, such as those in finance, had remained relatively stable.
Xu highlighted that lowly-paid workers relied on their income from work, but the better-off often had stocks and properties which contributed extra to their incomes.
She urged the government to create a social safety network by establishing an unemployment insurance scheme and a universal retirement protection system to provide long-term assistance for the poor.
But Xu predicted the income gap would narrow over time as the city continued to reduce its Covid-19 restrictions.
“The figure has plateaued, and it will drop as the pandemic measures continue to be relaxed and the economy rebounds,” she said.