Poverty
One of the great side effects of taking part in an election campaign – even a losing one – is that it obliges the candidate to look at the big picture. To step back from the frantic hurly burly of current events and identify the issues that really matter to a society. Thus it was that in the run up to the legislative council election in December I found myself thinking a great deal about poverty.
Although poverty can seem a simple word on the surface, it can also have hidden depths. For example there is both absolute poverty (people starving to death, without medical care or education etc) and relative poverty (in 2022 Hong Kong should a family without access to WIFI count as poor? A student without a mobile phone?) and so on. For the purposes of the campaign, I focused on two aspects: the situation of the working poor, and poverty among the elderly.
In Hong Kong we draw the poverty line at 50 per cent of median household income, which works out at $4,400 for a single person, $10,000 for a couple, and $20,400 for a four-person household. Hong Kong’s statutory minimum wage was last revised on 1 May 2019 when it was set at $37.50 per hour. The biennial review in 2021 froze it at that level for another two years. My manifesto recommended it be increased to $60 per hour progressively over the next LegCo term. Even at $40 per hour, a person working eight hours a day for 25 days per month would earn only $8,000, insufficient for two persons let alone a normal family household. Is it socially just when a person works a full shift but does not earn enough to support the family?
Latest estimates are that some 16,500 employees earn the basic minimum wage. There were only two comments on the proposal during the campaign. Another candidate opposed the idea saying it might lead to greater unemployment of the elderly. He works in a profession which charges several thousands of dollars per hour. The Employers’ Federation also expressed concern about practicalities.
My challenge to the government and those LegCo candidates who were successful is the same: what are your ideas for helping the working poor? At a time when there is a lot of focus on “common prosperity” have we really no plans for closing the wealth gap and addressing such a disparity in material wellbeing?
But the point about potential impact on the elderly is valid, and also needs to be addressed. In fact I think this issue is even more pressing than that of working poor as Hong Kong faces the prospect of a veritable tsunami of poverty among senior citizens in coming decades. Like many advanced economies, our society has a low fertility rate, below the natural replacement level of 2.1 live births per woman. Our inward migration rate is unnaturally low at the moment because of COVID, but even when normal travel returns may well be subdued given the increased affluence in the mainland. And Hong Kong is experiencing one of its periodic surges in outflow.
The combined result of these forces is that the dependency ratio – the number of persons of normal working age per senior citizen – is declining. There are serious consequences of this situation for individuals, employers, and for the government. The first and possibly greatest challenge for all three is a mindset one.
The old idea that people would reach a certain age and simply stop work must now be consigned to the history books. In the past people have tended to rely on their personal savings or family support or, as a last resort, public funds. But all three of these sources are now under pressure and in future will be even weaker. The main reason of course is a good one: rising longevity. Most Hong Kong people can now expect to live well into their 80s. Raising the “normal” retirement age from 60 to 65, which the administration eventually did, was a step in the right direction. But that still leaves a funding gap of some 20 years. Except for a small, privileged minority, personal savings – including MPF -- are not going to be sufficient.
The trend to smaller families means fewer children to support parents. The adverse demographics – greater calls on public finances, fewer taxpayers – also pull in the wrong direction.
What will all this mean in practice? First, it means people must be prepared to work for as long as they are able (physically and mentally) to contribute to the economy. And employers must be prepared to facilitate the process. That does not necessarily mean individuals clinging on to the title and position they held when in their prime. At some point, they must be ready to take a step back and accept a more junior, or part-time, role. The HR departments of major employers must work out ways to smooth feathers both for the individual and co-workers.
What about living arrangements? Most elderly will not want to be packed off into an institution, they would rather stay in familiar surroundings in their own home for as long as possible. That may well mean a substantial rise in importation of personal care workers. One hopes strategic planners in the social welfare and immigrations departments are addressing this option.
The government must play an important part in shifting mindsets. That is why the decision to lower eligibility for the $2 transport concession from 65 to 60 was so unhelpful. It may have bought a temporary increase in the popularity of a beleaguered government but it sent entirely the wrong message. Indeed, there are already calls for the medical voucher scheme which also kicks in at 65, to start at 60 instead.
All governments everywhere prefer to duck difficult issues if they can for as long as possible. It makes for an easier life which is human nature. But Hong Kong has reached the point where there are no easy options left on the table.