October 10, 2024
HONG KONG – When a Hong Kong woman found herself unexpectedly pregnant and facing unemployment with little savings in late 2023, she did not fully anticipate how hard life was about to get.
The fortysomething single mother, who wanted to be known only as Mandy for privacy reasons, had taken on an office job on a one-year contract in 2022, believing her role would most likely be extended at the end of that year.
But when the time came, Hong Kong’s economy was doing poorly and the company did not renew her contract due to budget issues.
She worked part-time for three months while heavily pregnant until she gave birth in May.
Between adjusting to her pregnancy, delivery and caring for her newborn, she has not found full-time work since December 2023 – and her bills are piling up.
“I underestimated the turbulence of the economy and overestimated myself,” Mandy, who lives with her five-month-old daughter in a public flat in the New Territories, told The Straits Times.
She recently returned to her previous part-time role, which she declined to disclose. “But the work is seasonal and uncertain. It’s not sustainable for me as a single mum with a baby.”
As a recent study shows poverty climbing in Hong Kong, Mandy’s story underscores how easily people can fall on hard times when the economy falters and their circumstances change.
Wealth gap widens
A report by non-governmental organisation (NGO) Oxfam Hong Kong on Oct 2 revealed that 20.2 per cent of the city’s population – or 1.4 million – are now considered poor. This compares with 18.3 per cent before the Covid-19 pandemic.
The wealth gap has also widened. The city’s richest people now make 82 times more money than the poorest, compared with 34 times in 2019.
The report, based on government data, puts the poverty line at a median monthly income of HK$5,000 (S$840) for a one-person household and HK$11,300 for a two-person household. Nearly 23 per cent of households were living in poverty in the first quarter of 2024.
The poorest 10 per cent of households earned a median HK$1,600 monthly, dropping 54 per cent from 2019. The richest 10 per cent of households earned HK$131,100, 10 per cent more than in 2019.
“The findings show that society is undergoing rapid changes in its social structure,” Ms Wong Shek Hung, the NGO’s director of its Hong Kong, Macau and Taiwan Programme, told ST.
“The issue of widening income disparity is becoming increasingly pressing. More importantly, these problems are exacerbated by the diminishing financial capacity of the government in the post-pandemic era,” she said, referring to how the government has been facing a rising budget deficit from a shortfall in revenue from land sales and stamp duties and higher welfare spending.
The government stopped using the poverty line as a reference for policymaking from 2022, citing a “possible over-estimation of the situation” after its 2021 report recorded a 12-year-high poverty rate of 26.3 per cent.
The figure was adjusted down to 7.9 per cent after the government factored in its cash handouts, public housing and other subsidies.
It has promised to launch a new, more accurate framework in 2024.
“The methodology of taking the median monthly household income as the sole indicator for measuring poverty has obvious limitations, as it neither takes into account household assets and liabilities nor covers in-kind benefits such as public medical services, subsidised housing and free education,” a government spokesman told ST.
“The government adopts the strategy of targeted poverty alleviation by directing resources to those most in need.”
‘Poor people everywhere’
As poverty rises with the recent years of economic instability, Professor Paul Yip of the University of Hong Kong (HKU) warned that it is no longer confined to the traditionally “poor” districts.
“Poor people are facing the problem of economic restructuring,” Prof Yip, from HKU’s department of social work and social administration, told broadcaster RTHK.
“The poor were usually mostly located in old districts like… Tuen Mun, Tin Shui Wai or Kwun Tong. But now, poverty has proliferated in every district in Hong Kong.”
While the economy has been recovering, led by strong export demand, it faces a sustained drop in private consumption and a real estate downturn.
Ms Sze Lai Shan, deputy director of the NGO Society for Community Organisation, said more Hong Kongers were becoming poorer, for various reasons.
“They may be sick, single parents or have lost their jobs. Or they could be earning a low income while facing high rents and inflation, with little money left for their three meals,” Ms Sze told ST.
“Life in Hong Kong is getting harder for such people, especially those with children.”
Mandy has resorted to selling little-used items she finds at home on online marketplace Carousell.
“I made a tiny profit from selling diapers bought at huge discounts at a baby fair. I also started trading supermarket coupons and selling spare second-hand baby stuff I receive from others,” she said.
“I never thought I’d do petty things like these or care about discounts. But now I have to make sure my every dollar counts.”
‘We can’t stop working’
Over in Wan Chai, a security guard in his 60s who wanted to be known only as Mr Chan, said he was thankful for his job after being intermittently out of work throughout the pandemic.
“I earn less now and everything is more expensive,” he told ST. “I’ve cut back on my spending, eat on the cheap and no longer travel back to my mainland home town. It can’t be helped. We have to work for as long as we can.”
With more Hong Kongers facing financial hardships, HKU’s Prof Yip and Oxfam’s Ms Wong called on the government to restore the poverty line.
“There is no contradiction between the poverty line and the government’s ‘targeted poverty alleviation framework’,” Ms Wong said. “The former aims to capture the overall landscape of poverty, while the latter is used to understand the specific problems faced by those in poverty.”
Economist Gary Lai, author of the book Poverty And The Unequal Society In Hong Kong, pinpointed education as a key area to combat poverty and inequality.
“Retraining and upgrading workers will give them the mobility to compete in this extraordinarily international marketplace,” he told ST.
“Education will help the children of the poor to escape the vicious circle of intergenerational poverty.”
Mandy, meanwhile, is still seeking a full-time job to bolster her finances.
“Every little bit I can earn or save now goes to my child,” she said.