12 October 2011

Poverty Amidst Riches — The Income Divide

"The real problem we have here is that people who work are still poor.  Immigration keeps wages down, and the unions are very weak.  This island is still talking about small government, big market.  But people are getting angry now."

Professor Wong Chack Kie from the Chinese University of Hong Kong was not talking about Singapore, but it almost seemed that he was.

Rather, he was talking about Hong Kong, one of the richest cities in the world, with average property prices some 40 per cent higher than London's.  But underneath its glittering skyline, almost a fifth of its population lives in poverty.

Hong Kong has always had a largely hidden underclass.  But in the 14 years since it was handed back to China, the number of poor has increased 50 per cent to 1.26 million.

Until now, Beijing had allowed Hong Kong to stick to its policy of low taxes, small government and minimal welfare.  But with conditions for the poor now worse than that in many mainland cities, there is pressure on the Hong Kong government to find a solution.

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Notes

1. Hong Kong Under Pressure as Poverty Levels Rise The Telegraph (10 Oct 2011).

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