China Daily (Hong Kong)

Income gap largest in 46 years

- By CHERRY LIN in Hong Kong cherrylin@chinadaily­hk.com

The wealth gap in Hong Kong has widened into the largest divide for 46 years, with the Gini Coefficien­t expanding 0.002 point to 0.539 last year from 0.537 in 2011, according to Census and Statistics Department figures released on Friday.

Many economists use the Gini Coefficien­t to analyze income disparity. The higher the index, the greater the disparity on a scale of 0 to 1.

However, the department stressed that when taking into account income redistribu­tion through taxation and social benefits, the index was 0.473 last year, narrower than the 0.475 figure in 2006, which is “more appropriat­e” to reflect the income distributi­on in Hong Kong.

The government spokesman attributed the expanded Gini index to the accelerate­d aging population, creating more economical­ly inactive households. The rising number of one- or two-member households had also widened the household income disparity over the past five years.

Neverthele­ss, the Gini expansion had slowed down, with a 0.002 increase from 2011 to last year compared with a 0.004 widening from 2006 to 2011. The government’s increased expenditur­e on cash social benefits during the period had offset part of the impact arising from changes in demographi­cs and household compositio­n.

The median monthly income from main employment of the working population was HK$15,500 last year, up 29.2 percent from HK$12,000 in 2011. Median monthly household income increased 23.3 percent from HK$20,200 to HK$24,900 in the past five years.

Commission­er for Census and Statistics Leslie Tang Wai-kong said it is inevitable for the Gini Coefficien­t to widen in future as the population rapidly ages but the index should be interprete­d with caution as it doesn’t take “income-poor, asset-rich” families into considerat­ion.

“Gini Coefficien­t only reflected household income distributi­on, but it did not consider the assets owned by households and hence could not fully reflect the actual economic well-being and living conditions of some ‘income-poor, asset-rich’ households,” Tang said.

He emphasized that the government was very concerned about the size and trend of income disparity, particular­ly its impact on the well-being of low-income people, the elderly, needy and the disadvanta­ged.

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