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Discussion Starter · #1 ·
Reducing the wealth gap will help HK thrive
19 June 2007
South China Morning Post

Governments all over the world worry about income inequality, fearing that the wider the gap between the haves and have-nots, the more likelihood of social discontent. But figures released yesterday showing that Hong Kong has among the worst such gaps among developed societies are a matter of particularly serious concern.

The wealth gap is increasingly becoming an issue that cannot be ignored. Chief Executive Donald Tsang Yam-kuen has made poverty reduction one of his priorities. A series of schemes has been launched to improve the skills of lower-paid and older workers and to make those without jobs employable. But more needs to be done.

Statistics show a growing divide over the past decade, with the number of households earning less than HK$4,000 a month up 2.5 percentage points and the number with incomes of HK$40,000 or more increasing 2 points. Hong Kong's Gini coefficient, used to measure the wealth gap, has increased significantly over the past 10 years. It is high by international standards.

Comparisons across societies on such figures are not conclusive as each government gathers, compiles and presents income statistics differently, while the welfare systems they operate provide protection to varying degrees. Our safety net of public housing and welfare benefits for the needy and education and health care for all have made for a remarkably stable and law-abiding society. No city with so many people in such a small area, coupled with the pressures of high-rise living, can claim similar public safety levels.

However, even after adjustments have been made for the support the government intervention provides for those on low incomes, Hong Kong's coefficient remains high. There is, therefore, no room for complacency.

Inequality of wealth is not a new concept. The gap between the super-rich tycoons of today and the poorest employee is not as great as a century ago, given the benefits the government provides. But that does not make it acceptable. More must be done to close the gap. It is important that concerted efforts are made to create a more level playing field. Only through equality of opportunity can Hong Kong prosper and thrive in an increasingly competitive regional economic environment.

Some moves are being made in this direction. The social enterprises programme, which encourages companies, non-governmental groups and individuals to set up businesses to employ and train the disadvantaged, is one such venture. Another is the wage protection movement, with a promise from the chief executive that if this voluntary programme does not ensure fair salaries are paid in relevant sectors, the government will go ahead with a minimum wage law in October next year.

But minimum wage legislation is not, by itself, a guarantee of narrowing the income divide. Far better is for conditions to be created so that the talents of all people in the community can be fully tapped, no matter whether they are wealthy or poor. It is equally pressing, with the pressures posed by a rapidly ageing population, that pending health-care reforms create a system that is sustainable while continuing to meet the needs of the poor.

Education and training are central to achieving more equitable wealth distribution. Qualifications push workers up the job ladder or into better-paying careers. But the government must also seek to make Hong Kong an even more attractive place in which to set up business.

The government has recognised the need to tackle the wealth gap. But its efforts need to be substantially increased if it is to make the changes necessary to improve livelihoods.
 

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Discussion Starter · #2 ·
Struggling to survive on the poverty line
Hong Kong Standard
Friday, June 22, 2007

Hong Kong may be riding the economic boom, but not everyone is cashing in.
The Society for Community Organization, or SoCO, a nongovernment organization, is worried about the widening wealth disparity gap. It is calling for more effective social assistance policies, including the creation of a poverty line, minimum wages and a secondary safety net.

Commissioner for Census and Statistics Fung Hing-wang said last week the Gini coefficient - a standard of measuring income disparity on a scale from zero to one - had reached 0.533.

Although not an extreme figure, this is considered high for a fully developed city like Hong Kong, and is also a significant rise from the 0.518 recorded in 1996.

SoCO spokesperson Fok Tin-mun said the Commission on Poverty had not been sincere in developing a comprehensive range of policies to prevent the situation from deteriorating further. The commission's term will end June 30.

Besides the usual remedies such as job creation and occupational retraining, the organization favors the creation of a poverty line to identify people in need of assistance, the introduction of a minimum wage and a universal retirement protection scheme, as well as increased educational subsidies for sundry payments such as air-conditioning fees and book purchases.

SoCO is also an enthusiastic advocate for the establishment of a secondary safety net to provide assistance to poor families that are ineligible or unwilling to bear the label of being on the dole. This envisioned safety net would provide subsidies for essential services such as housing, medicine, education, transportation and child care.

Such a safety net has its merits, as in the case of Hung Yin, a 58-year-old former street sleeper.

Hung was admitted to Hong Kong through legal marriage, but before she could apply for housing, her husband died and she became a street sleeper.

She has never received aid under the Comprehensive Social Security Assistance scheme and believes in earning her own living, doing odd jobs.

"We street sleepers are searching for jobs every day and even retraining to escape from such a situation." Hung said.

She can now afford to rent her own living quarters - a tiny room which costs her HK$1,200 per month, leaving her with HK$600 from her meager income to pay essential expenses.

To Hung, any extra costs, such as for transportation and medicine, no matter how modest the amount, would be unaffordable.

Mrs Leung, an unemployed housewife and a mother of three, faces similar problems. She and her family survives on her husband's monthly HK$6,000 income. After paying for rent, water, electricity, transportation and school expenses, she has no money left.

"We don't have money to buy food," Leung said. "We just go to the vegetable stores and pick up leftover veggies." If lucky, she can get leftover fish, but meat is out of the question.

"We got sick a few times eating this food. Once my son had a stomach ache, but I had to tell him it was nothing [to be worried about]."
 

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Discussion Starter · #4 ·
Asian millionaires grow in 2006, slower pace seen-report
By Ian Chua and Saeed Azhar

HONG KONG/SINGAPORE, June 28 (Reuters) - The number of millionaires in Asia jumped last year, pushing their combined wealth up 10.5 percent to $8.4 trillion, but growth is expected to slow in line with a cooling global economy, a survey shows.

Strong economic expansion, led by China and India -- the world's two fastest growing major economies -- robust foreign direct investments and growing confidence in the region have swelled the ranks of Asia's rich, the annual World Wealth Report by Merrill Lynch and Capgemini showed on Thursday.

"In the Asia Pacific, the high net-worth population accelerated from 7.3 percent in 2005 to 8.6 percent in 2006 (to 2.6 million)," Victor Tan, Merrill's Asia Pacific chief equity strategist, told a media briefing in Hong Kong.

Tiny Singapore saw the fastest increase globally in the number of high-net-worth individuals. The number of people with more than $1 million in financial assets excluding their home rose 21.2 percent to 66,660.

Soaring wealth, high savings and ample potential have made Asia the world's hottest market for international and private banks seeking to cater to the rich.

Standard Chartered Plc. , for example, launched its private banking business in India this month, looking for a slice of the action in Asia's second-fastest growing economy that is dominated by Merrill Lynch and Citigroup .

Singapore's pace was closely followed by India, where the number of millionaires rose 20.5 percent to 100,015, and Indonesia where growth was 16 percent to 20,000.

"Singapore is a little boat of 4.5 million people that floats very nicely when the global economy is doing well," Mark Matthews, Merrill Lynch's chief Asia strategist told a news conference in Singapore.

"As you can see from these numbers, Singapore's growth has accelerated -- not only economic growth, but also savings."

Hong Kong's wealthy grew 12.2 percent to 86,618, ranking the city as the 10th fastest in the world.

Willie Chan, another Merrill equity strategist, said the city's relatively slower growth rate was due to a high-base effect as the number of wealthy people had risen sharply in 2005.

China, with an economy growing at 10.5 percent in 2006, saw a 7.8 percent increase in wealthy individuals to 345,000.

By comparison, disposable per capita income of urban Chinese was 11,759 yuan in 2006 or about $1,545, according to official data from state news agency Xinhua.

Further details of how Asian countries ranked by wealth will be revealed in an Asia Pacific survey due in October.

The report also showed that wealthy investors had shifted more money into property at the expense of other investments, lured by high returns from commercial real estate investments and real estate investment trusts.

The trend was most dramatic in the Asia Pacific, where 29 percent of assets from wealthy individuals was held in real estate, up from 16 percent a year ago, the report showed.

"Looking forward to year-end 2008, high-net-worth individuals are likely to shift their allocation back towards alternative investments after realising profits in their real estate investments," Tan said.

But rising interest rates globally may sap the strong cash flows that have helped to drive recent growth, and economic growth in Asia and Latin America was expected to ease as global demand slowed, the report said.

The biggest risk that could hurt global economic expansion, and in turn wealth expansion, would be if the Chinese economy unexpectedly slowed down, Matthews said.

But so far there was little likelihood of such a slowdown happening in the near future, he added.

Global assets held by wealthy investors rose 11.4 percent to $37.2 trillion in 2006, but that is set to slow to a 6.8 percent annual rate between 2006 and 2011 to US$51.6 trillion.

In Asia Pacific, the growth rate is seen slowing to 8.5 percent per annum.
 

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Discussion Starter · #7 ·
Hong Kong's poor doubled in 20 years: study

HONG KONG, Sept 16, 2007 (AFP) - Despite its booming economy, more than 20 percent of people in Hong Kong are living in poverty, more than double what it was two decades ago, according to a study released Sunday.

Chua Hoi-wai, director of the Hong Kong Council for Social Services which commissioned the report, said he was worried about the widening wealth gap, notably among people aged 45 to 64.

"Most of the people in this age group are low-skilled workers. They either don't have a job or are on a very low salary," he said.

"The most worrying thing is that these people are usually the ones who support the whole family. If they were on low income and unemployed, the whole family would suffer.

"Although we have seen an economic recovery here, people at the grass-roots are not benefiting from it," he told AFP.

The report found 1.33 million of the nearly seven million who live in this southern Chinese territory earned as little as 3,000 Hong Kong dollars (384 US dollars) per month in 2006.

That was up 112 percent on the 1986 figure, a huge rise even after taking into account that Hong Kong's overall population has increased by a quarter since then.

Those aged 45-64 and living under the poverty line recorded the biggest growth in the past five years, up 34 percent, while pensioners in the same category grew 19.5 percent.

Last month, the Hong Kong government said vibrant exports on the back of a buoyant economy had led to a 6.3 percent growth in the second quarter and it raised its growth forecast for 2007.

But labour unions said their figures show the number of people on low-paid jobs has risen sharply, as has the number working more than 55 hours a week.
 

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Discussion Starter · #8 ·
Shock as number of working poor soars despite growth
Hong Kong Standard
Tuesday, September 25, 2007

Despite the strong economic rebound, the number of people earning less than HK$5,000 a month has shot up drastically by 87 percent in the past 10 years to almost 419,000 according to an Oxfam study.

During the same period, the number of workers in the "extra poor" category - those earning less than HK$3,000 a month - saw an even bigger increase of 103 percent.

The study, conducted by Oxfam Hong Kong using the latest Census and Statistics Department figures, has put renewed pressure on the campaign for legislation on minimum wage.

The study found that the number of "working poor," those making less than the median monthly salary of HK$5,000, soared from 222,800 in 1996 to 418,600 in 2005 - about 13 percent of the 3.3 million workforce.

This group included dishwashers, cleaners, shop clerks and others in low- skilled service occupations.

Most of the working poor are women, especially middle-aged, who face sex and age discrimination in the job market, and those with casual contracts, according to principal researcher Wong Hung, an assistant professor at the Chinese University of Hong Kong's Department of Social Work. The problem is also serious among ethnic minorities, especially Pakistanis (36.1 percent) and Nepalese (44.6 percent).

The number of workers in the "extra poor" employment group rocketed from 68,600 in 1996 to 139,000 in 2005 - a jump of 103 percent.

Oxfam Hong Kong program manager Joseph Woo Man-lung said about 38 percent of poor people are not benefiting from the 5.1 percent increase in the territory's gross domestic product over the past decade.

Last year's Hong Kong Gini Coefficient - which measures the wealth gap - stood at 0.533, the highest ever.

Woo said the government's Wage Protection Movement for cleaning and security workers, launched last year, is not achieving its goals.

He noted only about a third of the companies are participating in the voluntary program, and most of them are reportedly not paying the required wages. Cleaners in banks, for example, are receiving only HK$21.90 an hour, and not HK$26.60 as proposed.

Despite the increase in the number of working poor, few apply for social handouts because of severe stereotyping toward receivers, Woo said.

According to the International Labor Organization, 101 nations, including developing countries, already have minimum wage legislation, while Hong Kong lags behind, he said.

Oxfam Hong Kong director-general John Sayer said a coherent economic, employment and welfare policy is needed, combining economic development plans with related training programs, progressive business, employment law and tax programs.

"The problem of the working poor is getting worse and the salary gap is getting wider over the past decade. It's either the policies are not working or not enough," he said.
 

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Discussion Starter · #9 ·
Rich-poor gulf still wide in HK
August 9, 2021
The Standard Excerpt

Hong Kong remains in the top one third of regions with the biggest gap between rich and poor, says Secretary for Labour and Welfare Law Chi-kwong.

"The disparity between rich and poor is an indisputable fact," Law wrote in his blog yesterday.

Hong Kong's ranking in the Gini coefficient improved from 60th to 48th in this year's World Competitiveness Yearbook but Law said the city's wealth disparity is still among the top one third of the 64 regions ranked by the report.

The annual report is conducted by the Institute for Management Development from Switzerland.

Law said the improvement for Hong Kong this year came as the Gini coefficient is based on post-tax and post-social transfer household income, which the report has adopted.

More : Rich-poor gulf still wide in HK
 
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