Hong Kong's wealth gap reaches 'tipping point' under Covid as unemployment rises among poor, Oxfam says

October 2022
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The pandemic has worsened Hong Kong’s wealth gap, with the city’s poorest making 47 times less than its richest residents, Oxfam Hong Kong has said. In the pre-Covid era, the highest earners made 34.3 times more.

“The wealth gap of Hong Kong has reached the tipping point,” Oxfam’s director general Kalina Tsang said on Wednesday. She added that the relaxation of travel restrictions and social distancing measures may not have an immediate economic impact on those who earn the least.

Oxfam’s latest report on poverty and employment during the pandemic, which was published on Wednesday, analysed statistics from the Census and Statistics Department from 2019 to the first quarter of 2022.

“The government always emphasises that the overall unemployment rate is falling. Yet, we found that the unemployment rate of people in poverty is actually eight times higher than that of those above the poverty line,” Oxfam’s assistant research and advocacy manager Terry Leung said when presenting the report.

The Census and Statistics Department last month said that unemployment had fallen from 4.3 per cent in May to July to 4.1 per cent in June to August, with the number of unemployed Hongkongers declining by around 6,300.

Oxfam’s assistant research and advocacy manager Terry Leung (left), director general Kalina Tsang (middle), and director of Hong Kong, Macau, Taiwan programme Wong Shek-hung (right). Photo: Lea Mok/HKFP

However, Leung said that the unemployment rate and the underemployment rate of people in poverty were eight times and four times higher than other income groups, respectively, with the elderly and women faring the worst at finding employment.

Lack of care homes

Among those who were unemployed and aged at least 65 – the age of retirement – every second person was living below the poverty line, according to Oxfam’s figures. Carers of elderly residents in around 70,000 households were also older adults, which Leung said was a result of the lengthy waiting time – 42 months on average – for care facilities.

He also said that Covid outbreaks had resulted in the suspension of classes in schools and kindergartens, making it difficult for women, as the primary caregivers of children, to join the labour force. Child care services in most areas were also insufficient, Leung said.

Two elderly patients were seen outside the Caritas Medical Centre in Shum Shui Po on February 16, 2022. Photo: Kenny Huang/Studio Incendo.

The average monthly income of the poorest households in Hong Kong fell by 22.9 per cent to HK$2,700 from 2019 to 2022, according to the report, while that of the richest rose by 6.3 per cent to HK$127,600.

Minimum wage

Even after the government relaxed its hotel quarantine requirement for incoming travellers and some social distancing measures, Wong Shek-hung, director of the Hong Kong, Macau, and Taiwan programme, said she thought low-income families would need additional time to recover from the financial impact of Covid-19.

“Maybe Hongkongers would travel more and spend money overseas in the future, making it more difficult for the local catering industry to recover economically,” Wong said.

Oxfam urged the government to raise the city’s minimum wage to HK$45.5 to alleviate the economic struggles of the poorest households in Hong Kong. The current minimum wage is HK$37.5.

“It’s not a huge jump as the minimum wage has been frozen for three years,” Wong said, comparing the policy review to a health check: “we do our health check every year, so we should also review the minimum wage annually.”

The organisation also suggested that the Temporary Unemployment Relief Scheme – which granted an one-off subsidy of HK$10,000 to eligible unemployed individuals – should be extended until the end of 2022, and the subsidies for employers to hire staff aged 40 or higher should be increased.