19 SEP 2023
Gaping wealth gap leaves Hong Kong's poorest making 57.7 times less than richest while struggling to recover post-pandemic
Oxfam Hong Kong urges government to take measures to narrow wealth gap and improve employment conditions for low-income workers
Oxfam Hong Kong released its ‘Hong Kong Poverty Report 2023: A Polarised Recovery in the Post-Pandemic Era’ today, which analysed data from the Census and Statistics Department. It found that the overall poverty rate reached 20 per cent in the first quarter of 2023, with over 1.36 million people living in poverty.
Comparing the median monthly incomes of the richest and poorest decile of households pre- and post-pandemic, it found that the poorest decile made 57.7 times less than the richest decile in the first quarter of 2023 – up from 34.3 times in 2019. This highlights that even as the pandemic recedes and society returns to normal, the path to economic recovery for low-income and high-income families is sharply divided. High-income families have benefited more from the economic recovery, while low-income families not only failed to benefit from it but also faced new challenges.
Kalina Tsang, Director General of Oxfam Hong Kong, said: ‘Despite society returning to normal, the problem of wealth inequality has become increasingly serious, and the slow recovery among poor families has sounded alarm bells for society. Before considering importing foreign labour, Oxfam Hong Kong calls on the government to adjust the minimum wage, create jobs and offer incentives to support employment at the grassroots level. The government should also strengthen its support for subdivided flat households and expand its Community Living Room project to all 18 districts in proportion to the population of subdivided flats in the area. Further, it should proactively work with businesses and non-governmental organisations (NGOs), and invest in social innovation projects that focus on poverty to scale up the efforts and impacts of charitable initiatives.’
Oxfam Hong Kong analysed data from the government's statistics department between 2019 and 2022, as well as the first quarter of 2023. It looked at the median monthly household income by decile (the first decile being the poorest and the tenth decile being the wealthiest). In the first quarter of this year, the median monthly income for the poorest ten per cent of households was only HK$2,300, a drastic drop of more than one-third (34.3 per cent) compared to before the pandemic. The second decile also saw a decrease of around 6 per cent. In contrast, the wealthiest ten per cent of households had a median monthly income of HK$132,600, a growth of over 10 per cent since 2019. Even families in the ninth decile saw an 8.8 per cent increase. The overall median household income was HK$29,500, a slight increase of 1.7 per cent (HK$500) from before the pandemic.
Working poverty remains an issue in the post-pandemic era, with nearly 210,000 people (6.4 per cent of the employed population) still living in poverty in the first quarter of this year despite having jobs. Almost 60 per cent of those experiencing working poverty have full-time employment. They mostly work in the Retail, Accommodation, and Food Services sector, where one in ten workers experiences working poverty.
In the first quarter of this year, the unemployment rate was 3.1 per cent (114,800 people), with over 40 per cent of them living in poverty. Sixty-seven per cent of unemployed individuals living in poverty reported that they were laid off or dismissed by their employers, highlighting how precarious employment is among grassroots workers in post-pandemic Hong Kong. Over 57 per cent of unemployed individuals living in poverty had been jobless for two months or more, and 31 per cent had been unemployed for six months or longer.
The number of economically inactive impoverished individuals also rose significantly, exceeding 1.1 million in the first quarter of this year – a 10.6 per cent increase compared to 2019. The poverty rate among economically inactive individuals now stands at 32.4 per cent, which is significantly higher than the overall poverty rate of 20 per cent. Nearly half (515,000) of these impoverished individuals are aged 65 or older, representing a sharp 31.5 per cent increase since 2019. Furthermore, childcare facilities remain inadequate, and the labour force participation rate among women living in poverty in the first quarter of this year has decreased compared to pre-pandemic levels.
Oxfam Hong Kong believes that as Hong Kong recovers from the pandemic, the city is also experiencing structural changes, particularly in terms of its aging population, decline in household sizes, and changes in the nature of low-skilled positions in the labour market. These factors have made poverty in Hong Kong more complex. Oxfam Hong Kong proposes the following recommendations:
- Adjust minimum wage annually to ensure basic income protection and attract (potential) labour force
Oxfam Hong Kong has continued to advocate that the government adjust the statutory minimum wage annually to ensure that wage levels keep pace with inflation, ensure that workers can support one other person, and surpass the average Comprehensive Social Security Assistance (CSSA) level.
- Promote a living wage to enhance social mobility
As the largest employer in Hong Kong, the government should lead by example and pay a living wage to outsourced workers. We also suggest that the government announce the living wage level ever year so that employers are aware of this and can choose to pay grassroots workers a living wage.
- Urge Hong Kong Stock Exchange to make ‘social’ disclosure in ESG reporting mandatory and add living wage reporting
The HKEx should ensure ‘social’ reporting is mandatory for companies, just as ‘governance’ and ‘environment’ in ESG are, to enhance companies’ overall social corporate responsibility performance and transparency. Mandatory social reporting should also include information about whether the company pays its employees a living wage.
- Support subdivided flat residents and expand Community Living Room project to all 18 districts according to subdivided flat population in each area
The Community Living Room project must focus on the convenience of subdivided housing households in the area. The government should expand the project to all 18 districts proportionally and regularly review the effectiveness of the project. It should also establish an initial rent system for these tenants to ensure that vulnerable grassroots residents are adequately protected and rents are set at a fair price. It should also extend the residency period of Light Public Housing until residents are allocated public housing.
- Promote community economy and bazaars
The government should establish a fund to support bazaars and offer areas in new estates as well as government land to help non-profit organisations organise bazaars with and for people from lower-income backgrounds. This long-term initiative will assist stall owners from these backgrounds to sustain their businesses and foster the development of the community economy.
- Support more impactful social innovation projects by encouraging collaboration among government, businesses, and NGOs
The Hong Kong Chief Executive earlier expressed his desire to make Hong Kong an international centre for philanthropy. The Hong Kong Jockey Club recently announced that it would use HK$5 billion to establish a charity research institute. Oxfam Hong Kong welcomes this and considers this an important opportunity to enhance the impact of social innovation projects. It recommends that the institute allocate resources to enhance the social impact assessment of relevant stakeholders’ ability. Oxfam Hong Kong also urges the government to encourage businesses to use the Pay-for-Success model, Innovative Programmes and other models to actively support poverty alleviation and social innovation projects, and make a more significant social impact.
- Improve childcare services to offer economically inactive women option of joining workforce
The government should regularly review the effectiveness of the School-based After School Care Service Pilot Scheme and explore how it can expand this service to all 18 districts in the long run, so more schoolchildren can benefit from it.
- Enhance protection for casual workers and create more flexible job positions in the public sector
The Labour Department is currently reviewing provisions about continuous contracts of employment in the Employment Ordinance. Oxfam Hong Kong supports the implementation of the proposed ‘60-hour proposal’ (working 60 hours over four weeks) as it will better safeguard the rights of the casual workers. Oxfam Hong Kong also recommends that the public sector create more flexible jobs, such as hiring non-technical roles (e.g., cleaners, venue managers) for events like waterfront night markets, or roles related to accompanying patients to doctor’s visits and sorting through recycling.
- Review effectiveness of Employment Programme for the Elderly and Middle-aged
The government can enhance the Employment Programme for the Elderly and Middle-aged by considering adjustments to employer retention subsidies, with a suggested subsidy of HK$3,000 for both employers and employees to make the programme more attractive.
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Oxfam is a global organisation committed to creating a world without poverty through its advocacy, development and humanitarian work.
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