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Opinion / Zou Hanru
Opportunity trumps wealth in Hong Kong
By Zou Hanru (China Daily)
Updated: 2007-07-20 07:22
Hong Kong's rich-poor gap has grown to record proportions in recent
years, figures released by the Census and Statistics Department suggest.
The Gini Coefficient, the statistical measure of wealth equality, stood
at 0.533 in 2006. It was 0.518 in 1996. The internationally recognized
alert level is 0.4. This puts Hong Kong ahead of many other developed and
developing economies, including the mainland.
To give readers a better idea of the size of the gap: The biggest earner
in the city last year paid more in income tax than an average worker
could possibly earn in 1,000 years.
These figures sound worrying enough. But they could only be telling half
the story. As Mark Twain said more than a century ago: "There are three
kinds of lies: lies, damned lies and statistics."
I do not use this quote to insinuate that such indexes are created to
mislead the public. But it wouldn't hurt for us to look at these figures
from a different perspective.
To begin with, such indexes have their limitations. As a matter of fact,
there are many other types of statistics available to measure income
equality: the Hoover coefficient, the Coulter coefficient, the Schultz
coefficient, the Kullback-Leibler Redundancy, the coefficient of
variation, middle-quintile share, you name it. Each deals with some
aspects of income inequality while ignoring others.
The index in question - the Gini Coefficient - does not take into account
the different definitions of poverty or purchasing power parity in
different places.
And, as Secretary for Financial Affairs and the Treasury Chan Ka-keung
pointed out in a Legislative Council meeting the other day, the index is
also affected by such factors as the economic, population and family
structure.
For instance, the increasing number of single-parent families has driven
the index up. We must also not forget that many of the new migrants
coming here for family reunions do not have the skills necessary to find
a decent job. A large proportion of the population increase over the past
decade was in this category.
In fact, major cities in Europe and North America are facing the same
situation. New migrants tend to end up in slums and on the lowest rungs
of society.
But even if the widening wealth gap is a reality, is it really as bad a
thing as many people have been led to believe? Is it some kind of sin
that some people are so much richer than others?
At least not in a capitalistic society like Hong Kong.
To put the wealth gap in a positive light: It serves as a motivation for
people to move up the income ladder. It is the very reason people have to
work hard.
The condition of the poor in Hong Kong is hardly comparable to their
counterparts in third world countries. Ample sources of revenue for
government coffers have made it possible for Hong Kong to cast a wide
social security net. People in need are cared for. Starvation is never
heard of in this city. Many of those who choose to sleep on the streets
do so out of their own free will. Children go to school for free.
Government loans are readily available to students who suffer from
financial constraints but want to pursue higher education.
When underprivileged people and their offspring are given the opportunity
to improve their lot and move up the social ladder through hard work, the
wealth gap is not an incurable social ill.
What matters is "equality of opportunity", not "equality of wealth".
E-mail: zouhr@chinadaily.com.hk
(China Daily 07/20/2007 page10)
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