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Life in Hong Kong is harder than ever, unless you're a tycoon

Manufacturing jobs have vanished, replaced by highly paid bankers and by low-wage waiters

Bloomberg  |  Hong Kong 

Manufacturing jobs have vanished, replaced at one end by highly paid bankers and at the other by low-wage waiters.
Manufacturing jobs have vanished, replaced at one end by highly paid bankers and at the other by low-wage waiters.

Lau can’t help but glance nervously at the calendar. Her next paycheck isn’t for a week, and she doesn’t have enough money to feed her family of four crammed into her small, government-subsidised apartment. Her husband can’t work, and the kids don’t understand why their mother keeps buying stale food.

“We’ll eat rice soup for all three meals,” said the 42-year-old, a cashier at the Wellcome supermarket chain controlled by the Lau, who asked that only her surname be used, has been the sole provider for her family. She makes $5.40 an hour, nowhere near the $15-an-hour minimum wage in cities like Seattle, where living cost is cheaper.

It’s an increasingly familiar tale in Hong Kong, a city of soaring skyscrapers and glittering luxury boutiques that’s become perhaps the epitome of income inequality in the developed world. Two decades after Britain handed the former colony over to China, its richest citizens are thriving, thanks to their oligopolistic control over the city’s retail outlets, utilities and ports. But not people like Lau.

The city has been lionised for decades by some economists as the closest thing to a free economy, with few regulations of any kind, and no retail sales or capital gains taxes. More than half of Hong Kong’s working population live below the level at which they must pay income tax — and for the minority who do, the standard rate is a low 15 per cent.

But wages have failed to keep up with costs. A common measure of inequality, the Gini coefficient, in which 0 is absolute equality and 1 is all money in a single person’s hands, illustrates the problem: The latest figure out last week puts at a record 0.539, the highest since data started being kept in the 1970s. It’s the biggest disparity in Asia, greater than places like Papua New Guinea and Brazil.

is a very interesting case study, where profits are sheltered from competition while labour cannot easily organise,” said Emmanuel Saez, an economics professor at the University of California, Berkeley.

Formerly remunerative manufacturing jobs — used to be the world’s toy-making capital — have vanished, replaced at one end of the spectrum by highly paid bankers and at the other by low-wage waiters. 

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Life in Hong Kong is harder than ever, unless you're a tycoon

Manufacturing jobs have vanished, replaced by highly paid bankers and by low-wage waiters

Manufacturing jobs have vanished, replaced by highly paid bankers and by low-wage waiters
Lau can’t help but glance nervously at the calendar. Her next paycheck isn’t for a week, and she doesn’t have enough money to feed her family of four crammed into her small, government-subsidised apartment. Her husband can’t work, and the kids don’t understand why their mother keeps buying stale food.

“We’ll eat rice soup for all three meals,” said the 42-year-old, a cashier at the Wellcome supermarket chain controlled by the Lau, who asked that only her surname be used, has been the sole provider for her family. She makes $5.40 an hour, nowhere near the $15-an-hour minimum wage in cities like Seattle, where living cost is cheaper.

It’s an increasingly familiar tale in Hong Kong, a city of soaring skyscrapers and glittering luxury boutiques that’s become perhaps the epitome of income inequality in the developed world. Two decades after Britain handed the former colony over to China, its richest citizens are thriving, thanks to their oligopolistic control over the city’s retail outlets, utilities and ports. But not people like Lau.

The city has been lionised for decades by some economists as the closest thing to a free economy, with few regulations of any kind, and no retail sales or capital gains taxes. More than half of Hong Kong’s working population live below the level at which they must pay income tax — and for the minority who do, the standard rate is a low 15 per cent.

But wages have failed to keep up with costs. A common measure of inequality, the Gini coefficient, in which 0 is absolute equality and 1 is all money in a single person’s hands, illustrates the problem: The latest figure out last week puts at a record 0.539, the highest since data started being kept in the 1970s. It’s the biggest disparity in Asia, greater than places like Papua New Guinea and Brazil.

is a very interesting case study, where profits are sheltered from competition while labour cannot easily organise,” said Emmanuel Saez, an economics professor at the University of California, Berkeley.

Formerly remunerative manufacturing jobs — used to be the world’s toy-making capital — have vanished, replaced at one end of the spectrum by highly paid bankers and at the other by low-wage waiters. 
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Business Standard
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Life in Hong Kong is harder than ever, unless you're a tycoon

Manufacturing jobs have vanished, replaced by highly paid bankers and by low-wage waiters

Lau can’t help but glance nervously at the calendar. Her next paycheck isn’t for a week, and she doesn’t have enough money to feed her family of four crammed into her small, government-subsidised apartment. Her husband can’t work, and the kids don’t understand why their mother keeps buying stale food.

“We’ll eat rice soup for all three meals,” said the 42-year-old, a cashier at the Wellcome supermarket chain controlled by the Lau, who asked that only her surname be used, has been the sole provider for her family. She makes $5.40 an hour, nowhere near the $15-an-hour minimum wage in cities like Seattle, where living cost is cheaper.

It’s an increasingly familiar tale in Hong Kong, a city of soaring skyscrapers and glittering luxury boutiques that’s become perhaps the epitome of income inequality in the developed world. Two decades after Britain handed the former colony over to China, its richest citizens are thriving, thanks to their oligopolistic control over the city’s retail outlets, utilities and ports. But not people like Lau.

The city has been lionised for decades by some economists as the closest thing to a free economy, with few regulations of any kind, and no retail sales or capital gains taxes. More than half of Hong Kong’s working population live below the level at which they must pay income tax — and for the minority who do, the standard rate is a low 15 per cent.

But wages have failed to keep up with costs. A common measure of inequality, the Gini coefficient, in which 0 is absolute equality and 1 is all money in a single person’s hands, illustrates the problem: The latest figure out last week puts at a record 0.539, the highest since data started being kept in the 1970s. It’s the biggest disparity in Asia, greater than places like Papua New Guinea and Brazil.

is a very interesting case study, where profits are sheltered from competition while labour cannot easily organise,” said Emmanuel Saez, an economics professor at the University of California, Berkeley.

Formerly remunerative manufacturing jobs — used to be the world’s toy-making capital — have vanished, replaced at one end of the spectrum by highly paid bankers and at the other by low-wage waiters. 

image
Business Standard
177 22