Saturday, 12 January 2013

Treading on Dangerous Territory

This may be the year Hong Kong will have an all-out class war.

Property prices are still rising despite the government's best intentions to rein them in, while inflation is also taking a bit hit on people's wallets, leaving them with less to eat for more money and having to shell out more for decent service.

Now the Census and Statistics Department has revealed that Hong Kong people's median pay only rose about 10 percent between 2001 to 2011. In 2001, the median monthly income for men was HK$12,000 ($1,548).

But 10 years later their salary only increased to HK$13,000, a rise of only 8.3 percent, without taking inflation into account. Women's incomes went up 10 percent from HK$10,000 to HK$11,000.

Even more disappointing was that the median income for men and women aged 15-24 remained unchanged for 10 years at HK$8,000, and for women aged 25-34, their salaries remained unchanged at HK$12,000.

"This is shocking and miserable," said Labour Party chairman and lawmaker Lee Cheuk-yan. "Hong Kongers' lives have not improved in a decade and have even turned worse. When the economy is prosperous, bosses offer pay rises of only 2 to 3 percent.

"But when the economy was not good, like during the SARS crisis, bosses cut their employees' pay by 20 to 30 percent."

He added the slow growth of the median income showed that the gap between the rich and poor was ever widening. In 2011, Hong Kong's Gini coefficient, that measures this gap was at 0.537, a record high. The scale is from 0 to 1, with the number moving closer to 1 indicates greater income disparity.

Associate professor of economics at Chinese University Terence Chong Tai-leung, estimates the inflation rate for the decade was about 30 percent. While inflation takes into account a range of goods, he believes the cost of food surged higher.

For example the average retail price of a 1kg top-grade chicken was HK$35.81 in 2001, but jumped to HK$83.40 in 2011.

The price for 1kg of hung sam yu or golden thread, a common type of fish, increased from HK$40.35 to HK$74.39, while 1kg of white cabbage rose from HK$9.61 to HK$15.61.

Another factor is the incredible greediness of landlords who are raising retail rents so high that cha chaan tengs, noodle shops and small grocery stores are either raising prices, serving smaller quanitities or shutting down.

Pretty soon us locals won't be able to afford anywhere for a bite to eat, hence the existence of gutter oil in some Hong Kong restaurants in order to cut costs, but to the danger of our health.

Labour Party's Lee noted that a decade ago, Hong Kong people spent about 30 percent of their monthly salary on paying their mortgage, but now it was eating up half their salary.

"Hong Kong people just don't have much money left after paying for the mortgage and food."

So what are the politicians and more importantly Chief Executive Leung Chun-ying going to do about it?

If they want to avoid a class war they need to accelerate the construction of social housing, perhaps convert old warehouses into makeshift accommodations and push the business sector to take of its employees. Maybe it means pay raises, or better benefits, but they need to feel valued.

Otherwise we are going to see more social issues emerging, as if more divorces, suicides, domestic disputes, stealing and gambling addictions are what the city needs.

Hong Kong urgently needs to become a more compassionate society.

But it isn't going to happen until someone shows us the money.

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