Hong Kong must end its ‘tale of two cities' to thrive
A major challenge facing Hong Kong is how to address the problem of
wide income disparities , which affect the overall well-being of the community. The arrival of artificial intelligence (AI) and its potentially adverse impact on middle-class jobs may further exacerbate inequality.
Since 1981, Hong Kong's gross domestic product (GDP) per capita has increased over eightfold, affirming its status as a financial centre. However, low-income groups have not shared in the economic prosperity. In fact, over the past four decades, the rich-poor divide has remained unbridged and is widening.
Our research team examined four decades of census data using the Theil Index, a measure of income disparity where 0 is perfect equality and 1 represents a high degree of inequality. The Theil Index is helpful in looking at how much of the overall inequality stems from variations within a group and between groups.
Our results reveal that determinants such as place of birth, gender, age and residence have a significantly less pronounced impact on income gaps between groups than one might expect. The contribution of the gender pay gap to overall income inequality decreased from 0.025 in 1981 to 0.009 in 2021, reflecting a trend towards equal pay.
During this period, more women entered the workforce. Meanwhile, the number of individuals arriving in Hong Kong with one-way permits reached 1.12 million, diversifying the population.
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