Poverty Is Not an Accident

Rose Wu

(Ed. note: Poverty is often believed to be a minor issue in Hong Kong. Thus, we are devoting the February and March issues of our newsletter to this problem to highlight its prevalence and impact on people’s lives.)

Many Chinese people believe that a person is rich or poor because of their fate. Others may think that people are poor because they are lazy. According to a public opinion poll a few months ago, most of the respondents said that one should depend on oneself to survive and that it is immoral to depend on the government. This finding reflects the perception of many people in Hong Kong who still see the failures of the individual as the origin of poverty and who dismiss the structural problems in society which give rise to the problem. However, I want to argue that Hong Kong’s poverty is not an accident; rather, it is closely related to government policy as well as the trends of globalization and our laissez faire economic system.

First of all, Hong Kong’s poverty is not an isolated issue; it is closely tied to the recent development of China as well as our Asian neighbors under the flag of globalization. Since globalization depends on cheap labor, many companies in Hong Kong have moved to China to reduce their expenses, or they have hired imported laborers from mainland China as well as other Asian countries. Consequently, Hong Kong’s workers have become marginalized: their wages have been cut, their working hours have been prolonged, etc. Moreover, Hong Kong now tops the list among countries in Asia with the highest level of income inequality. Contributing to the income disparity in the community is the lack of a government policy to alleviate poverty.

While the people are forcing the government to tackle the widening gap between the rich and the poor, Financial Secretary Donald Tsang has insisted that under the new knowledge-based economy to which Hong Kong is moving it is difficult for people to make a living if they do not get further training, i.e., they have to help themselves. The government will only help those who are willing to receive retraining but not those whom it thinks only want welfare payments. This attitude again reinforces the belief that poverty is only the result of an individual’s ability to compete. Although the government recognizes that Hong Kong has a serious poverty

problem, it refuses to adopt concrete measures to solve the problem. Presently, the government still rejects the introduction of a minimum wage and refuses to readjust the low taxation system and to alter other policies to decrease the gap between the rich and the poor.

Another major source of income inequality in Hong Kong is the property market that over the years has produced windfall gains for developers, the government, banks and some homeowners. Through its impact on the stock market—mostly consisting of property developers and banks—government policy has benefited the more affluent section of society which buys shares at the expense of lower income groups who have saved primarily through low-yielding bank deposits that have barely kept ahead of inflation over the past 30 years. As many observers have noted, the influence of the richest tycoon in Hong Kong, Li Ka-shing, far exceeds that of even the government itself in the stock market since his family controls 26 percent of the value of the Hong Kong stock market or HK$1.30 trillion (US$167 billion) of its worth.

If social welfare policy is a way to redistribute wealth so as to reduce the gap between the rich and the poor, then the Hong Kong government has failed to show any sincerity toward solving the problem of poverty. First of all, in order to release its burden of taking care of the poor, the government has successfully promoted a culture of self-reliance. For example, the task of the government, says Chief Executive Tung Chee-hwa, is to pinpoint programs for the less fortunate, compatible with self-help, and assist people to find jobs. Secondly, Hong Kong should not follow the example of the welfare states in Europe. The role of the government for those who hold this view is that government should provide a free and fair opportunity for people to earn a living. Therefore, only those who are not able to survive, like the disabled and the elderly, are deserving of support from the government. Presently, the government’s Comprehensive Social Security Assistance Scheme (CSSA) for the poor is so limited that the majority of the poor are not qualified to apply nor does it provide adequate support to sustain a basic livelihood. Moreover, the retraining scheme that the government offers to enable the unemployed to re-enter the job market has been criticized as either irrelevant or too superficial so that most of the people who join the retraining program do not find it useful. According to government statistics, for instance, only 11.4 percent of the work force has joined the retraining program; and among these workers, the number of those who have a primary school education or below is 8.8 times less than trainees with a university education. These figures already indicate the technology gap that further marginalizes unskilled workers and that will be difficult to overcome.

To conclude, I want to argue that to tackle the issue of poverty we must not overlook the structural problem that is the hidden and real cause of poverty, for Hong Kong’s undemocratic political structure and its laissez faire economic policy that primarily serves the rich are the source of poverty in the community. As a result, the poor lose their bargaining power as they cannot participate in economic decision-making that affects their livelihood. They and their interests are sidelined in favor of those who already hold political and economic power. Without a change in the political and economic structure of Hong Kong, poverty will continue to remain a cancer in the community.