Income gap largest in 46 years
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.