Hong Kong is a heaven for the rich and hell for the poor

Hong Kong, one of the richest cities in the world and famously named the shopping paradise. However, behind the lights, there are a lot of people who sleep with their stomachs empty at night and never get enough food to eat every day.

Even though Hong Kong has a lot of millionaires, its poverty rate rises every year, meaning that the poverty gap between the rich and poor grows. Not surprisingly, Hong Kong has the highest Gini Coefficient in the world, which is 0. 533.Gini Coefficient is commonly used to indicate income inequality in a society; it is a number, which has a value between 0 and 1, as the value rises, the higher the degree of income inequality of the society. Rich people living in Hong Kong usually get better treatment, more resources and even more opportunities.

On the other hand, poor people are often discriminated against and this has a negative impact on their accessibility and treatment received in the labor market.I agree with the statement that Hong Kong is “a heaven for rich and hell for the poor”. In this essay, I will discuss what made Hong Kong “a heaven for the rich and hell for the poor”, which includes economic restructuring, unequal distribution of resources and the vicious cycle of poor people. Also, I will investigate the reasons that Hong Kong is named “A heaven for rich and hell for poor”; finally, I will discuss what can be done to tackle the poverty gap in Hong Kong. Economic restructuring of Hong KongTo begin with economic restructuring, began in 1970s, the production costs and land prices were increasing quickly and were very expensive and because of this, industrialists began to move their factories to China for lower production costs and higher profits.

However, this move decreased the number of manufacturing job opportunities and increased the unemployment rate and gradually led to the economic transformation in 1980s, as there were few factories left in Hong Kong, Hong Kong started to transform from an industrial-based economy to a service and knowledge-based economy.“The industry sector contracted sharply from 31. percent of GDP in 1980 to 15. 2 in 1998 and manufacturing industry, in particular, contracted even more sharply, from an average of 22. 6 of GDP to as low as 6. 6 percent during 1996-1998.

In contrast, the service sector expanded rapidly from 67. 5 percent in GDP in 1980 to 84. 7 percent in 1998. ” (Industrial restructuring in East Asia: towards the 21st century, page 211) The transformation declined the demand of manufacturing workers and raised the demand of service workers as it changed the knowledge and skill requirements of the labor force and the manufacturing workers do not have the skills needed.It resulted in the displacement of over half a million to Mainland for manufacturing workers and raised the unemployment rate.

As a result, this widens the poverty gap as well. The economic transformation also raised the demand for service workers while on the other hand, pushed down the demand of labor workers. The manufacturing workers that shift to the service sector generally receive less income of their lack of experiences and required skills in the service sector.Furthermore, most of the manufacturing jobs have a flexible employment, meaning that the workers receive unstable income and little job security, therefore when the workers become unemployed, they will easily fall into poverty.

Vicious cycle In Hong Kong, poor people are trapped in a vicious cycle due to ineffective policy measures taken by the government. To begin with, the financial assistance that the government provided for students in poor families is not enough and the students are unable to develop and learn normally like the students in rich families.This is because the government has harsh restrictions for the students applying for the assistance and the financial assistance does not include resources that the students need in order to complete their schoolwork, for example, a camera. This made the students almost impossible to overcome these obstacles, which may affect their future afterwards, and they might be trapped in the poverty cycle. “The poor families are unable to provide opportunities for the new generation to use new things and get in touch with information technology. (A Study on Living Conditions and Expectations of Children published by HKCSS in December 2003)Also, according to the report, since the education system emphasized the need for all-round development and the society is a knowledge-based economy.

Secondly, due to incomprehensive town planning by the government, most of the available jobs are located in city center. While a majority of the poor live in New Territories and other more remote areas, which public housing is located, the poor people are less willing to get a job in the city center due to the large amount of transportation fee needed to travel from work to home everyday.This increases the unemployment rate; decreases the people will to work and also creates the vicious cycle, as the poor people will never be able to escape from poverty. Thirdly, as the poor people are often unskilled and less educated, meaning that they have less job options and usually get labor work offers. This also means that they have little bargaining power and therefore have lower wages and long working hours.

The low income meant a lot of financial pressure on the workers’ families.As they have a very tight budget, they will not be able to afford private schools or tutorial classes after school; they can only struggle to pay for their children to attend government schools. However, the quality of public education is not as good and this will have a negative effect on the opportunities that the children receive when grown. Therefore, they may not be able to break the poverty cycle and succeed. Also, the lack of resources for their development drags down their self-esteem.

As a result, the children will be less motivated to succeed and this affects greatly their chances of breaking from the poverty cycle. Unequal distribution of resources A small amount of businessmen, officials and property developers control a majority of Hong Kong’s wealth. Therefore, the poor people who are on the bottom rungs of the economic ladder receive little shares from the society’s wealth. This can be shown when the rich people live in houses of 2000 square feet, the poor struggle to pay the rent of cage houses and sub-divided units.Also, according to the survey "Impact of Hostile Working Conditions on the Mental and Physical Health of Low Income People" conducted by The Caritas Hong Kong Community Development Service, a majority of the poor people in Hong Kong suffer from a very low life standard, e.

g. their furniture are scavenged from the streets, discarded by others; also their meals lack nutrition and food quality, due to the low income. However, on the other hand, the rich people in Hong Kong enjoy luxurious goods such as, shark fins and abalone.What can be done to tackle the poverty gap? As explained above, Hong Kong is a heaven for the rich and hell for the poor, due to the large poverty gap. In order to change this situation and make Hong Kong a heaven for both rich and poor, I suggest the government to formulate certain policy measures to tackle to widening poverty gap in Hong Kong; including 1) providing equal education for all; 2) develop a job security system. To begin with providing equal education for all, this includes infants, children, adults and elderly.

Providing equal education is essentially important because since Hong Kong is a knowledge-based economy, and only a good education will equip the children better for the future and gain more opportunities. However, the poor people now are unable to afford private schools or international schools, which are what most people, consider a “high-quality education”; and the poor people are forced to send their child to government schools, which are free but the quality of education is comparatively lower.As a result, they may receive fewer opportunities in the future when they start to work in the labor market, due to their education, and will generally receive less income, this creates a vicious cycle and the poor people will never be able to break through the poverty cycle and succeed. Therefore, by providing equal and high-quality education for all will ensure that the children, despite of their family backgrounds, will be able to achieve their full potentials and be equipped for the future.This will also allow the new generation of poor people to break the poverty cycle, and succeed.

Also, the government should also provide life-long education for adults for free as well, this will allow them to update themselves with the new knowledge, as the world is changing every second, therefore gain more bargaining power in the labor market and ultimately, receive more income and break the poverty cycle. Furthermore, by providing the elderly free education, the elderly will be able keep updated with the world and some will be able to work again in the labor market.For example, the education system in Finland is free and equal for all, the resources all equally distributed, and there were little differences in terms of resources and quality of education between urban schools and rural schools. In the Finnish education system, family background and social status does not matter and the children will be able to break the poverty cycle after receiving education. The education system was proved to be successful as the Organization for Economic and Development stated that the quality of Finnish education is the best in world.

Along with other effective policy measures, Finland has a low Gini index of 26. 8, one of the lowest in the world. This shows that providing equal and high-quality education for children can successfully tackle the poverty gap and allow them to break the poverty cycle. Secondly, I suggest that the Government should change the current social security system in order to tackle to poverty gap. According to Business Dictionary, a social security system is a Government program aimed at providing basic needs to citizens who are retired, unemployed, or unemployable due to a disability or disadvantage.

It is funded usually by mandatory payroll contributions (typically 5 to 8 percent of a paycheck) from both the employees and the employers, and from the government's tax revenue. The problems in the current social security system is that, since the amount of Mandatory Provident Fund is based on one’s income, after retirement, the funds are very likely to be insufficient, especially for the poor people, as their income is comparatively low.In order to fix this problem, I suggest that the government should set up a comprehensive mechanism against poverty, investigate the root problems of the Mandatory Provident Fund and tackle the poverty gap in Hong Kong. Changing the current job security system is unable to safeguard the people from poverty due to the small amount of money and the current system only pushes the poor people deeper into poverty as they are unable to work after retirement and have to rely on the CSSA.

ConclusionTo conclude, I strongly believe that Hong Kong is a heaven for the rich and hell for the poor because of 1) restructuring of Hong Kong’s economy, 2) unequal distribution of resources in Hong Kong’s society, 3) vicious cycle of the poor people. The poverty gap is widening very quickly and this will lead to a lot of consequences. In order to tackle the poverty gap, the government should provide equal education for all and also change the current job security system. The problem of poverty in Hong Kong is very urgent and severe so action must be taken immediately to avoid the poverty gap affecting the quality of future pillars of Hong Kong.