Explainer | Why the wealth gap? Hong Kong’s disparity between rich and poor is greatest in 45 years, so what can be done?
A HK$690 billion budget surplus and expanding economy, but a growing divide between the haves and have-nots. Why is Hong Kong so unequal, and what are the solutions?
Aid agency Oxfam has issued a 60-page report recommending the Hong Kong government set aside an extra HK$36.7 billion (US$4.7 billion) next year to prevent more people falling into poverty. The charity said the funds were needed to address the city’s widening wealth gap – the largest in 45 years. So how did Hong Kong come to be such an unequal society, and what else could be done to level the playing field?
How bad is the wealth gap in Hong Kong?
The difference between a society’s rich and poor is often measured using the Gini coefficient – statistician Corrado Gini’s index of how evenly income is distributed on a scale from zero to one. In June last year the figure for Hong Kong was 0.539, with zero indicating equality. The result was the highest in 45 years. The United States was at 0.411 and Singapore 0.4579. Hong Kong’s number has climbed 0.006 points since 2006, according to the city’s Census and Statistics Department.
In 2016 the median monthly household income of the top 10 per cent of Hongkongers was 43.9 times the bottom 10 per cent. The poorest would have to work three years and eight months on average to earn what the richest make in a month.
The city’s top 21 tycoons had assets collectively equalling Hong Kong’s HK$1.83 trillion fiscal reserves as of April, according to data published by Forbes. The top five tycoons earned HK$23.6 billion in dividends alone in 2016 and 2017. That amount was also never taxed as Hong Kong does not place a levy on dividends as part of efforts to maintain a “free economy”.