[SCMP Column] City of extreme inequality

August 01, 2016


I have a little ritual every Monday morning, as I arrive just before 7.00 in the morning at Hang Hau MTR station to come into my office. I carry with me a large carrier bag full of the past week’s newspapers. As I walk into the station, I first pass the long winding queue of elderlies standing impatiently alongside closely guarded stacks of give-away newspapers. The ‘vendors” only begin distributing them at 7.00.
Then as I approach the MTR turnstiles, I randomly pick one of the four or five tiny, bent old ladies that scout the station, and drop my newspapers into her eager arms. It feels good both to be environmentally conscientious, and to be a do-gooder at the same time.

But how often do I or other do-gooders stop to think through the unimaginable hardship that sits behind this daily dawn-time scavenging that sits at the heart of Hong Kong’s paper recycling business? As we think about the extremity of social and economic inequality in Hong Kong, surely the story starts here, every morning, at MTR stations across Hong Kong.

I have absolutely no idea how many old ladies (and it seems they are normally ladies rather than old men) gather every morning around the MTR entrances, but it must surely count into thousands. Every kilo of newspaper or cardboard earns them about 70cents. Apparently, these women on average earn around HK$40-50 a day – perhaps HK$1,000 a month. On the back of this crack-of-dawn activity, Hong Kong manages to recover every month about 948,000 tonnes of paper, almost all of it recycled in the Mainland. The business earns Hong Kong about HK$1.37bn in paper exports every year.

I have always thought the old ladies gather to collect newspaper partly as a hobby. After all, elderly people sleep rather less than us younger folk, and get up very early. Homes are tiny, and why not go gather early with friends, catch up on gossip, and earn a bit of pocket money at the same time to buy a little breakfast together. But I fear this rather endearing idea is naïve.

The grimmer reality is that these old ladies really need this extra cash, on top of the old age living allowance of HK$2,495 and perhaps the CSSSA payment of up to HK$3,340, to pay monthly rent, and basic foods. For those of us living at the opposite end of the income spectrum, it really is almost impossible to imagine how tough life must be with a total monthly income of HK$6-7,000. And this impossibility of imagination makes it easier to avoid guilt, or any recognition that something really needs to be done about it.

It is worth remembering the extremity of inequality in Hong Kong. According to economist Branko Milanovic in his recent book “Global Inequality”, for a household to sit among the 70 million households worldwide that occupy the “evil empire” – the “Top 1%” that have captured most of the economic gains achieved in the world economy over the past three decades – that household has to earn US$71,000 a year. That is about HK$46,000 a month. Take a quick look at Hong Kong’s household income statistics and you discover that over 23% of Hong Kong families have household incomes above that level. By comparison, just 12% of American families have household incomes above this level, and in Japan and Switzerland just 9%. That makes Hong Kong an extraordinarily lucky and privileged place for the richest quarter of the population.

But the household income data show a much grimmer contrast at the bottom end of the income spectrum. Around 30% of Hong Kong households subsist on HK$15,000 or less – and these paper-scavenging old ladies sit at the very bottom of that group. I have in recent weeks tried hard to imagine how I could possibly survive on an income of less than HK$15,000 a month, and I must confess I have failed. There is no process of arithmetic that would enable me to imagine a life worth living at such a meager level. For anyone reading this whose family actually lives at that incredibly austere level, I am full of admiration and deep angst at the same time. No wonder so many in our community feel so alienated and betrayed. Surely it is salt in the wound to be told that Hong Kong is among the world’s most affluent cities, or to see a candidate for chief executive (who shall remain nameless) spending more on a single bottle of wine than a whole family subsists on for an entire year.

This same point was forcefully driven home by an awesome back page graphic in last Mondays SCMP which tracked the cost of raising a family in Hong Kong for a high net worth family, a middle class family, and a “grassroots” family. In short, to raise a rich kid to adulthood (age 22) will cost a family around HK$14.2 million – or almost HK$1.2m a year or HK$100,000 a month. This will include obvious basics, but also things like a home helper, school and university fees, computer for study, a car, a long-haul holiday once a year, life insurance – and of course a cool HK$5.46m for an apartment.

Compare this with an average grass roots family – with no long haul holidays, living in public housing, and using public transport, and the price tag is still an intimidating HK$2.6 million. Spread over 22 years, that implies a basic annual cost of HK$100,000 – over HK$8,000 a month – for even a grassroots family to raise a child. No wonder so many couples in Hong Kong baulk at starting a family. And no wonder so many thousand fragile old ladies scavenge daily for newspapers.

Given this awful austerity, it still surprises me that Hong Kong women and men live longer than any other country in the world – 87.3 years for women, and 81.24 for men. Apparently a big factor is that Hong Kong people tend not to smoke cigarettes. But if they are gathering all that newspaper, perhaps that is a good idea.
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